Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period. (b) The provisions of Section 4.09(a) hereof shall not apply to: (1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing; (2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee of the Notes; (3) Indebtedness of the Company, the Issuer and their Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b)); (4) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Company or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter; (5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence; (6) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that (A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition; (7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness; (8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness; (9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred Stock; (10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk; (11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business; (12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b)); (13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness: (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively, (C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and (D) shall not include: (i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer; (ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or (iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; (14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either (A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or (B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation; (15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence; (16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit; (17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 3 contracts
Sources: Indenture (NXP Semiconductors N.V.), Indenture (Freescale Semiconductor, Ltd.), First Supplemental Indenture (Freescale Semiconductor, Ltd.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued Applicable Measurement Period would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof foregoing limitations shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with time not to exceed the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (i) $5,250.0 million, plus 550.0 million and (ii) €750.0 million, plus (iii) in the case 14.0% of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingConsolidated Tangible Net Worth;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Guarantee thereof) (other than any Additional Notes, if any, or guarantees with respect thereto), including any Guarantee of the Notes;
(3) Indebtedness incurred pursuant to the Existing Facilities in an aggregate principal amount at any time outstanding not to exceed the maximum amount available under the terms of each Existing Facility as in effect on the Company, Issue Date;
(4) Indebtedness of the Issuer and their the Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1), (2) and (23) of this Section 4.09(b10.11(b));
(45) Indebtedness (including Capitalized Lease Obligations and Purchase Money Obligations), Disqualified Stock and Preferred Stock incurred by the Company Issuer or any of its the Restricted Subsidiaries, Subsidiaries to finance the purchase, lease lease, expansion, construction, development, replacement, maintenance, upgrade, installation, replacement, repair or improvement of property (real or personal) ), equipment or equipment that is used any other asset (including, but not limited to, MSRs, Servicing Advances, mortgages or useful other loans, mortgage-related securities or derivatives, consumer receivables, REO Assets, Residual Interests, mortgage-related receivables or other similar assets (or any interests in a Similar Businessany of the foregoing)), whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstandingassets; so long as provided that the Liens securing such Indebtedness exists may not extend to any other property owned by the Issuer or any of its Restricted Subsidiaries at the date time the Lien is incurred and the Indebtedness secured by the Lien may not be incurred more than 270 days after the latter of the acquisition or completion of the construction of the property subject to the Lien, provided, further that the amount of such purchaseIndebtedness does not exceed the fair market value of the assets developed, lease constructed, purchased, leased, repaired, maintained, expanded, replaced, upgraded, installed or improvement or is created within 270 days thereafterimproved with the proceeds of such Indebtedness;
(5a) Indebtedness incurred by the Company Issuer or any of its the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of businessbusiness or consistent with past practice or industry norm, including letters of credit in favor of suppliers or trade creditors or in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance and (b) Indebtedness of the drawing Issuer or any of such its Restricted Subsidiaries as an account party in respect of letters of credit credit, bank guarantees or similar instruments in favor of suppliers, customers or other creditors issued in the incurrence ordinary course of such Indebtedness, such obligations are reimbursed within 30 days following such drawing business or incurrenceconsistent with past practice or industry norm;
(67) Permitted Funding Indebtedness;
(8) Permitted Securitization Indebtedness and Indebtedness under Credit Enhancement Agreements;
(9) Non-Recourse Indebtedness;
(10) Indebtedness arising from agreements of the Company Issuer or its any of the Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts earn-out or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets assets, a Subsidiary or a Subsidiaryan Investment, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(711) Indebtedness or Disqualified Stock of the Company Issuer issued to or held by a Restricted Subsidiary; provided that any such Indebtedness or Disqualified Stock owing to or held by a Restricted Subsidiary that is not a Guarantor Guarantor, excluding any Indebtedness or Disqualified Stock in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business or consistent with past practice or industry norm (other than and not in connection with the Issuer) is borrowing of money), is, to the extent applicable, expressly subordinated in right of payment (to the extent permitted by applicable law and it does not result in material adverse tax consequences) to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Indebtedness or Disqualified Stock (except to the Company Issuer or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance Subsidiary or any pledge of such shares of Preferred Stock;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtednessconstituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds to be an incurrence of such Indebtedness or Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(cis then outstanding) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to by this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b))clause;
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 3 contracts
Sources: Indenture (PennyMac Financial Services, Inc.), Indenture (PennyMac Financial Services, Inc.), Indenture (PennyMac Financial Services, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued Applicable Measurement Period would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof foregoing limitations shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with time not to exceed the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (i) $5,250.0 million, plus 500.0 million and (ii) €750.0 million, plus (iii) in the case 14.0% of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingConsolidated Tangible Net Worth;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Guarantee thereof) (other than any Additional Notes, if any, or guarantees with respect thereto), including any Guarantee of the Notes;
(3) Indebtedness incurred pursuant to the Existing Facilities in an aggregate principal amount at any time outstanding not to exceed the maximum amount available under the terms of each Existing Facility as in effect on the Company, Issue Date;
(4) Indebtedness of the Issuer and their the Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1), (2) and (23) of this Section 4.09(b10.11(b));
(45) Indebtedness (including Capitalized Lease Obligations and Purchase Money Obligations), Disqualified Stock and Preferred Stock incurred by the Company Issuer or any of its the Restricted Subsidiaries, Subsidiaries to finance the purchase, lease lease, expansion, construction, development, replacement, maintenance, upgrade, installation, replacement, repair or improvement of property (real or personal) ), equipment or equipment that is used any other asset (including, but not limited to, MSRs, Servicing Advances, mortgages or useful other loans, mortgage-related securities or derivatives, consumer receivables, REO Assets, Residual Interests, mortgage-related receivables or other similar assets (or any interests in a Similar Businessany of the foregoing)), whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstandingassets; so long as provided that the Liens securing such Indebtedness exists may not extend to any other property owned by the Issuer or any of its Restricted Subsidiaries at the date time the Lien is incurred and the Indebtedness secured by the Lien may not be incurred more than 270 days after the latter of the acquisition or completion of the construction of the property subject to the Lien, provided, further that the amount of such purchaseIndebtedness does not exceed the fair market value of the assets developed, lease constructed, purchased, leased, repaired, maintained, expanded, replaced, upgraded, installed or improvement or is created within 270 days thereafterimproved with the proceeds of such Indebtedness;
(56) Indebtedness incurred by the Company Issuer or any of its the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of businessbusiness or consistent with past practice, including letters of credit in favor of suppliers or trade creditors or in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit performance, completion or the incurrence of such Indebtednesssurety bonds, such obligations are reimbursed within 30 days following such drawing health, disability or incurrenceother employee benefits or property, casualty or liability insurance or self-insurance;
(67) Permitted Funding Indebtedness;
(8) Permitted Securitization Indebtedness and Indebtedness under Credit Enhancement Agreements;
(9) Non-Recourse Indebtedness;
(10) Indebtedness arising from agreements of the Company Issuer or its any of the Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts earn-out or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets assets, a Subsidiary or a Subsidiaryan Investment, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(711) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor Guarantor, excluding any Indebtedness in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business or consistent with past practice (other than and not in connection with the Issuer) borrowing of money), is expressly subordinated in right of payment (to the extent permitted by applicable law and it does not result in material adverse tax consequences) to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause;
(12) Indebtedness of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor, excluding any Indebtedness in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business or consistent with past practice (and not in connection with the borrowing of money), such Indebtedness is expressly subordinated in right of payment (to the extent permitted by applicable law and it does not result in material adverse tax consequences) to the Notes or the Guarantee of the Notes of such Guarantor; provided, further, that any subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause;
(13) shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such Preferred Stock or Disqualified Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock or Disqualified Stock (except to the Company Issuer or another Restricted Subsidiary or any pledge of its Restricted Subsidiariessuch Capital Stock constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed in each case to be an issuance of such shares of Preferred Stock or Disqualified Stock, as applicable (to the extent such Preferred Stock or Disqualified Stock is then outstanding), not permitted by this clause;
(1014) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for and, to the purpose extent constituting Indebtedness, of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing riskobligations under Permitted Warrant Transactions;
(1115) obligations in respect of self-insurance and obligations in respect of stays, customs, performance, indemnity, bid, appeal appeal, judgment, surety and surety other similar bonds or instruments and performance, bankers’ acceptance facilities and completion guarantees and similar obligations provided by the Company Issuer or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of businessbusiness or consistent with past practice or in connection with judgments that do not result in an Event of Default;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any of its Restricted Subsidiary equal Subsidiaries in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued pursuant to this clause (16)(a) and any outstanding amount of Indebtedness under clause (17) of this Section 10.11(b) incurred to refinance Indebtedness initially incurred in reliance on this clause (16)(a), does not at any one time outstanding exceed, 200.0% of the net cash proceeds received by the Company Issuer since immediately after the Transaction Issue Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies Issuer or cash contributed to the capital of the Company Issuer (in each case, other than Excluded Contributions or proceeds of Disqualified Stock or sales of Equity Interests to the Company Issuer or any of its Subsidiaries) as determined in accordance with clauses (3)(B3)(c) and (3)(C3)(d) of Section 4.07(a10.10(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b10.10(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1), (2) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, Issuer or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued pursuant to this clause (12)(b16)(b) and any outstanding amount of Indebtedness under clause (17) of this Section 10.11(b) incurred to refinance Indebtedness initially incurred in reliance on this clause (16)(b), does not at any one time outstanding exceed the greater of (x) $900.0 350.0 million and (y) 10.0% of Consolidated Tangible Net Worth (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b16)(b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b16)(b) but shall be deemed incurred for the purposes of pursuant to Section 4.09(a10.11(a) hereof from and after the first date on which the Company Issuer or such Restricted Subsidiary could have incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b10.11(a));
(1317) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or the issuance by the Issuer or any Restricted Subsidiary, Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which that serves to refund refund, refinance, replace, renew, extend, defease, repay, prepay, redeem or refinance retire (collectively, “refinance” with “refinances,” “refinanced” and “refinancing” having a correlative meaning) any Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any of its Restricted Subsidiaries incurred or issued as permitted under Section 4.09(a10.11(a) hereof and clauses (2), (34), (45) and (12)(a) of this Section 4.09(b16), this clause (1317) and clause clauses (1418), (22), (23), (27) and (28) of this Section 4.09(b10.11(b) or any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay accrued but unpaid interest, dividends, premiums (including reasonable tender premiums), defeasance costs, underwriting discounts, fees, costs and expenses (including original issue discount, upfront fees or similar fees) in connection therewith with such refinancing (the “Refinancing Indebtedness”) on or prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded refinanced (or refinancedrequires no or nominal payments in cash (other than interest payments) prior to the date that is 91 days after the maturity date of the Notes),
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu in right of payment to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu in right of payment to the Notes or the such Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,, and
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) include Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of the Company Issuer or the Issuera Guarantor; provided, further, that subclause (A) of this clause (17) shall not apply to any refinancing of any Secured Indebtedness;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(1418) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, Issuer or a Restricted Subsidiary incurred or issued to finance an acquisition or Investment or (y) Persons that are acquired by the Company Issuer or any a Restricted Subsidiary or merged into, amalgamated with or amalgamated into consolidated with the Company Issuer or a Restricted Subsidiary in accordance with the terms of this IndentureIndenture (including designating an Unrestricted Subsidiary as a Restricted Subsidiary); provided that after giving pro forma effect to such Investment, acquisition, merger merger, amalgamation or amalgamation consolidation, either:
(A) the Company Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, 10.11(a); or
(B) the Fixed Charge Coverage Ratio of the Company Issuer and the its Restricted Subsidiaries is equal to or greater than immediately prior to such Investment, acquisition, merger merger, amalgamation or amalgamationconsolidation, provided, however, that on a pro forma basis, the aggregate amount of Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to clause (x) by any Restricted Subsidiaries that are not Guarantors, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued pursuant to this proviso and any outstanding amount of Indebtedness under clause (17) of this Section 10.11(b) incurred to refinance Indebtedness initially incurred in reliance on this proviso, does not at any one time outstanding exceed the greater of (i) $140.0 million and (ii) 4.0% of Consolidated Tangible Net Worth;
(15a) Cash Management Obligations, (b) Indebtedness in respect of netting services, overdraft protections and similar arrangements and other Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
and (16c) Indebtedness owed on a short-term basis of no longer than 30 days to banks and other financial institutions incurred in the ordinary course of business or consistent with past practice of the Company or any of Issuer and its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of with such letter of credit;
(17) (A) any guarantee by the Company banks or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 3 contracts
Sources: Indenture (PennyMac Financial Services, Inc.), Indenture (PennyMac Financial Services, Inc.), Indenture (PennyMac Financial Services, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its the Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company Issuer and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided that the amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors shall not exceed $15 million at any one time outstanding.
(b) The provisions of Section 4.09(a) hereof shall not apply to:
(1) the incurrence of Indebtedness under the Credit Facilities by the Company, the Issuer or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount of $475 million outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of less (i) $5,250.0 million, plus the amount of Indebtedness then outstanding under clause (19) and (ii) €750.0 millionany permanent payments (with respect to revolving borrowings and letters of credit, plus (iiionly to the extent revolving commitments are correspondingly reduced) actually made by the borrower thereunder following the Issue Date in the case respect of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection thereunder with such refinancingNet Proceeds from an Asset Sale;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Guarantee) other than any Additional Notes), including any Guarantee of the Notes;
(3) Indebtedness of the Company, the Issuer and their its Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Company Issuer or any of its Restricted Subsidiaries, Subsidiaries to finance the purchase, lease lease, construction, installation, repair or improvement of property (real or personal) or equipment (other than software) that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets, in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0at any time outstanding the greater of (x) $15 million and (y) 1.5% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterAssets;
(5) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, unemployment insurance and other types of social security or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that however, that, upon the drawing of such letters of credit or the incurrence of such Indebtednesscredit, such obligations are reimbursed within 30 days following such drawing or incurrencedrawing;
(6) Indebtedness arising from agreements of the Company Issuer or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
however, that (Aa) such Indebtedness is not reflected on the balance sheet of the Company Issuer, or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (66)(a)) and (a)); and
(Bb) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-non cash proceeds (the fair market value of such non-non cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company Issuer and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such other Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such other Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such other Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred StockStock not permitted by this clause (9);
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees and other obligations of a like nature provided by the Company Issuer or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any Restricted Subsidiary equal to 200.0100% of the net cash proceeds received by the Company Issuer since immediately after the Transaction Issue Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies Issuer or cash contributed to the capital of the Company Issuer (in each case, other than Excluded Contributions or proceeds of Disqualified Stock or Designated Preferred Stock or sales of Equity Interests to the Company Issuer or any of its SubsidiariesSubsidiaries or amounts applied to make a Restricted Payment in accordance with clause (2) of Section 4.07(a) as determined in accordance with clauses (3)(B3(b) and (3)(C3(c) of Section 4.07(a4.07(b) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) (together with amounts applied under clause (13) to refinance Indebtedness or Disqualified Stock initially incurred in reliance on this clause (12)(a)) and (b) Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, Issuer or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencepreference which, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b))20 million;
(13) the incurrence by the Company Issuer or any Restricted Subsidiary, Subsidiary of the Issuer of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund refund, replace or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a3) of this Section 4.09(b), above and this clause (13) and clause (14) below of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund refund, replace or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded refunded, or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(DC) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer, that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the IssuerGuarantor; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired (whether by asset acquisition or otherwise) by the Company Issuer or any Restricted Subsidiary Guarantor or merged or amalgamated into the Company Issuer or a Restricted Subsidiary Guarantor in accordance with the terms of this the Indenture; provided that such Indebtedness, Disqualified Stock or Preferred Stock is not incurred in connection with or in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate, such acquisition or merger and, provided further that, after giving pro forma effect to such acquisitionacquisition or merger, merger or amalgamation either
(Aa) the Company Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in the first sentence of this Section 4.09(a) hereof4.09, or
(Bb) the Fixed Charge Coverage Ratio of the Company Issuer and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger acquisition or amalgamationmerger;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (Aa) any guarantee by the Company Issuer or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, ; or
Appears in 2 contracts
Sources: Indenture (INC Research Holdings, Inc.), Indenture (INC Research Holdings, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectivelyan incidence thereof, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company Issuer will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis of the Issuer for the Company and its Restricted Subsidiaries’ Issuer’s most recently ended four fiscal quarters for which internal financial statements are available immediately Test Period preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued (or, in the case of Indebtedness under Designated Revolving Commitments, on the date such Designated Revolving Commitments are established after giving pro forma effect to the incurrence of the entire committed amount of Indebtedness thereunder, in which case such committed amount under such Designated Revolving Commitments may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this proviso) would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such fourTest Period; provided, further, Restricted Subsidiaries of the Issuer that are not Guarantors may not incur Indebtedness or issue Disqualified Stock or Preferred Stock under this paragraph if, after giving pro forma effect to such incurrence (including a pro forma application of the net proceeds therefrom), the aggregate amount of Indebtedness and Disqualified Stock and Preferred Stock of Restricted Subsidiaries that are not Guarantors incurred or issued pursuant to this paragraph then outstanding would exceed the greater of (x) $120.0 million and (y) 30% of Run-quarter periodRate Adjusted EBITDA of the Issuer for the most recently ended Test Period on the date of such incurrence or issuance.
(b) The provisions of Section 4.09(a) hereof shall will not apply to:
(1i) the incurrence of Indebtedness under pursuant to Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of drawn letters of credit and bankers’ acceptances thereunder (with drawn letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness ) in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with time outstanding not to exceed the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, sum of (iA) $5,250.0 million1,535.0 million and (B) the Permitted Incremental Amount; provided, that any Indebtedness incurred under this Section 4.09(b)(i) may be refinanced with additional Indebtedness in an amount equal to the principal of the Indebtedness so refinanced, plus any additional amount to pay premiums (ii) €750.0 millionincluding tender premiums), plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereofaccrued and unpaid interest, the aggregate amount of feesexpenses, underwriting discounts, premiums and other defeasance costs and expenses Incurred fees in connection with such refinancingtherewith;
(2ii) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes and the Guarantees (not including but excluding any Additional Notes), including any Guarantee of the Notes;
(3iii) the incurrence of Indebtedness of the Company, by the Issuer and their Subsidiaries any Restricted Subsidiary in existence on the Issue Date or the Merger Date (other than excluding Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b), but including the Existing Secured Notes and Indebtedness in respect of Existing Mortgage Debt);
(4iv) (A) the incurrence of Attributable Indebtedness, (B) Indebtedness (including Capitalized Lease Obligations and Purchase Money Obligations), ) and Disqualified Stock incurred or issued by the Issuer or any Restricted Subsidiary and Preferred Stock incurred issued by the Company or any of its Restricted Subsidiaries, Subsidiary to finance (x) the construction of the Life Time Living facility in Henderson, Nevada and (y) the purchase, lease lease, expansion, construction, installation, replacement, repair or improvement of property (real or personal) ), equipment or equipment other assets, including assets that is are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof (excluding any Incremental Amounts) and all other Indebtedness, Disqualified Stock and/or Preferred Stock incurred or issued and outstanding under this clause (4)iv)(B)(y) at such time, not to exceed 4.0the greater of (1) $120.0 million and (2) 30% of Total Assets at any time outstanding; so long as such Indebtedness exists at Run-Rate Adjusted EBITDA of the Issuer for the most recently ended Test Period on the date of such purchaseincurrence and (C) any Refinancing Indebtedness thereof (it being understood that any Indebtedness, lease Disqualified Stock or improvement Preferred Stock incurred or is created within 270 days thereafterissued pursuant to this clause (iv) will cease to be deemed incurred, issued or outstanding for purposes of this clause (iv) but will be deemed incurred or issued for the purposes of Section 4.09(a), clause (3) or (4) of the Permitted Incremental Amount under clause (i)(B) or clause (xxxi) of this Section 4.09(b) from and after the first date on which the Issuer or such Restricted Subsidiary could have incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under clause (3) or (4) of the Permitted Incremental Amount under clause (i)(B) or clause (xxxi) of this Section 4.09(b) or Section 4.09(a) without reliance on this clause (iv));
(5v) (A) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries Subsidiary constituting reimbursement obligations with respect to letters of credit credit, bank guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of businessbusiness or consistent with industry practice, including letters of credit in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, unemployment insurance or other social security legislation or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance and (B) the incurrence of such IndebtednessIndebtedness by the Issuer or any Restricted Subsidiary as an account party in respect of letters of credit, such obligations are reimbursed within 30 days following such drawing bank guarantees or incurrencesimilar instruments in favor of suppliers, trade creditors or other Persons incurred in the ordinary course of business or consistent with industry practice;
(6vi) the incurrence of Indebtedness arising from agreements of the Company Issuer or its any Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition;
(vii) the incurrence of Indebtedness or the issuance of Disqualified Stock of the Issuer to a Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Issuer or any Restricted Subsidiary); provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness for borrowed money owing or shares of Disqualified Stock issued to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the NotesNotes to the extent permitted by applicable law and it does not result in adverse tax consequences; provided further that provided, further, any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness or shares of Disqualified Stock (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall will be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness (to the extent such Indebtedness is then outstanding) or issuance of Disqualified Stock, as applicable, not permitted by this clause (vii);
(8) viii) the incurrence of Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Issuer or any Restricted Subsidiary); provided that if provided, any such Indebtedness for borrowed money incurred by a Guarantor incurs such Indebtedness and owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except Guarantor to the Company or another Restricted Subsidiary) shall be deemedextent permitted by applicable law and it does not result in adverse tax consequences; provided, in each casefurther, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any such subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien) will be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause (viii);
(ix) the issuance of Shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided, any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary that holds such Preferred Stock or Disqualified Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock or Disqualified Stock (except to the Company Issuer or another Restricted Subsidiary or any pledge of its Restricted Subsidiariessuch Indebtedness constituting a Permitted Lien) shall will be deemed deemed, in each case case, to be an issuance of such shares of Preferred StockStock or Disqualified Stock (to the extent such Preferred Stock is then outstanding) not permitted by this clause (ix);
(10x) the incurrence of Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk);
(11xi) obligations the incurrence of Obligations in respect of self-insurance and Obligations in respect of performance, bid, appeal and surety bonds and performance, banker’s acceptance facilities and completion guarantees guarantees, indemnifications and similar obligations provided by the Company Issuer or any Restricted Subsidiary or Obligations in respect of its Restricted Subsidiaries letters of credit, bank guarantees, non-recourse carve-outs or similar instruments related thereto, in each case in the ordinary course of businessbusiness or consistent with industry practice, including those incurred to secure health, safety and environmental obligations;
(12A) (a) the incurrence of Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal in an aggregate principal amount or liquidation preference at any one time outstanding of up to (1) 200.0% of the net cash proceeds received by the Company Issuer and its Restricted Subsidiaries since immediately after the Transaction Date June 10, 2015 from the issue or sale of Equity Interests of the Company Issuer and the Guarantors or any of its direct or indirect parent companies or cash contributed contributions to the capital of the Company Issuer and the Guarantors including through consolidation, amalgamation or merger (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company Issuer or any of its SubsidiariesSubsidiary) as determined in accordance with clauses (3)(Biv)(C)(2) and (3)(Civ)(C)3) of Section 4.07(a) hereof and (2) 100.0% of the principal amount of Indebtedness of the Issuer and its Subsidiaries that is converted into Equity Interests (other than Disqualified Stock or sales of Equity Interests to the Issuer or any Subsidiary or any Equity Interests that are preferred shares that bear a cash-pay dividend), to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b4.07(a); and
(B) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) the incurrence of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencepreference that, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued, as applicable, pursuant to this clause (12)(bxii)(B), does not at not, together with any one time outstanding Refinancing Indebtedness in respect thereof (excluding any Incremental Amounts), exceed the greater of (x) $900.0 120.0 million and (y) 30% of Run-Rate Adjusted EBITDA of the Issuer for the most recently ended Test Period on the date of such incurrence (and any Refinancing Indebtedness thereof); plus, in the event of any extension, replacement, refinancing, renewal or defeasance of any such Indebtedness or Disqualified Stock, an amount equal to the amount of any premium required to be paid under the terms of the instrument governing such Indebtedness, Disqualified Stock or Preferred Stock and any defeasance costs and any fees and expenses (including original issue discount, upfront fees or similar fees) incurred in connection with the issuance of such new Indebtedness or the extension, replacement, refunding, refinancing, renewal or defeasance of such Indebtedness or Disqualified Stock; it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued pursuant to this clause (12xii) (b) shall will cease to be deemed incurred incurred, issued or outstanding for purposes of this clause (12)(bxii) but shall will be deemed incurred or issued for the purposes of Section 4.09(a), clause (3) hereof or (4) of the Permitted Incremental Amount under clause (i)(B) or clause (xxxi) of this Section 4.09(b) from and after the first date on which the Company Issuer or such Restricted Subsidiary could have incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under clause (3) or (4) of the Permitted Incremental Amount under clause (i)(B) or clause (xxxi) of this Section 4.09 (a4.09(b) hereof or Section 4.09(a) without reliance on this clause (12)(b)xii);
(13xiii) the incurrence by the Company Issuer of Indebtedness or any Disqualified Stock or the incurrence by a Restricted Subsidiary, Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which that serves to refund refund, refinance, extend, replace, renew or refinance defease (collectively, “refinance” with “refinances,” “refinanced,” and “refinancing” having a correlative meaning) any Indebtedness, Indebtedness (including any Designated Revolving Commitments) incurred or Disqualified Stock or Preferred Stock incurred issued as permitted under Section 4.09(a) hereof and clauses (2ii), (3iii), (4iv) and (12)(axii)(A) of this Section 4.09(b), this clause (13xiii) and clause clauses (14xiv), (xxiii) and (xxxi) of this Section 4.09(b) or any successive Refinancing Indebtedness with respect to any of the foregoing;
(xiv) the incurrence of:
(A) Indebtedness or Disqualified Stock of the Issuer or Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary incurred or issued to so refund finance an acquisition or refinance such Indebtedness, Disqualified Stock Investment (or Preferred Stock including additional Indebtedness, Disqualified Stock other purchase of assets) or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees that is assumed by the Issuer or any Restricted Subsidiary in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturitywith such acquisition or Investment; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,and
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Issuer or any Restricted Subsidiary or merged into, amalgamated or amalgamated into consolidated with the Company Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that provided, in the case of (A) and (B), either:
(1) after giving pro forma effect to such acquisition, merger amalgamation, consolidation or amalgamation either
merger, either (AI) the Company Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
Ratio Test; (BII) the Fixed Charge Coverage Ratio of for the Company and the Restricted Subsidiaries Issuer is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orconso
Appears in 2 contracts
Sources: Indenture (Life Time Group Holdings, Inc.), Indenture (Life Time Group Holdings, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (ai) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Company shall not permit any of its Restricted Subsidiary Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and any Restricted Subsidiary that is a Guarantor may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary that is a Guarantor may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of the Company for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:to (collectively, “Permitted Debt”):
(1i) the incurrence Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under any Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount not to exceed the greater of (x) $180 million and (y) the Borrowing Base, in each case, outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus ;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer Company and any Guarantor the Guarantors of Indebtedness represented by the Notes Original Securities and the Guarantees, as applicable (not including and any Additional NotesExchange Securities and guarantees thereof), including any Guarantee of the Notes;
(3iii) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b)), including any Indebtedness being repaid with the proceeds of the offering as described in the Offering Memorandum;
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company or any of its Restricted Subsidiaries, Subsidiaries to finance the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and Indebtedness then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed 4.0the greater of (x) $25 million and (y) 3% of Total Assets at the time of Incurrence, at any one time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5v) Indebtedness incurred Incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtednesscredit, such obligations are reimbursed within 30 days following such drawing or incurrencedrawing;
(6vi) Indebtedness arising from agreements of the Company or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the disposition of any business, assets or a SubsidiarySubsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary lending such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are Incurred in the ordinary course of business (excluding Hedging Obligations entered into and not for speculative purposes): (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases;
(11xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder of the Company in an aggregate principal amount or liquidation preferencewhich, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed the greater of (x) $30 million and (y) 4% of Total Assets at the time of Incurrence, at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Incurred or issued under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which the Company Company, or such the Restricted Subsidiary Subsidiary, as the case may be, could have incurred Incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a4.03(a) hereof without reliance on upon this clause (12)(bxii));
(13xiii) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of the Company or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness or other obligations by the Company or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Securities or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of such Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantor’s Guarantee with respect to the Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the incurrence Incurrence by the Company or any of its Restricted Subsidiary, Subsidiaries of Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company which serves to refund refund, refinance or refinance defease any Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred as permitted under Section 4.09(a4.03(a) hereof and clauses (2ii), (3iii), (4xiv) and (12)(axv) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock Stock, including additional any Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), defeasance costs fees and fees expenses in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock Indebtedness being refunded or refinanced,;
(B2) has a Stated Maturity which is no earlier than the Stated Maturity of the Indebtedness being refunded or refinanced;
(3) to the extent such Refinancing Indebtedness refinances (ix) Indebtedness subordinated or pari passu junior to the Notes Securities or any the Guarantee thereofof such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes Securities or the Guarantee at least to the same extent of such Restricted Subsidiary, as the Indebtedness being refinanced or refunded applicable or (iiy) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,;
(C4) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilitiesaggregate principal amount (or if issued with original issue discount, the Notes, aggregate accreted value) then outstanding of the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness being refinanced plus premium and fees Incurred in connection with such refinancing; and
(5) shall not include (x) Indebtedness of any a Restricted Subsidiary of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness Company that is not applied to the repayment or prepayment a Guarantor that refinances Indebtedness of the Senior Credit Facilities, such Notes, NXP Notes Company or Existing Secured Notea Guarantor, or Refinancing (y) Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes Company or Existing Secured Note, or Refinancing a Restricted Subsidiary that refinances Indebtedness of any of the foregoing, as applicable, andan Unrestricted Subsidiary;
(D) shall not include:
(ixv) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any of its Restricted Subsidiary Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided provided, however, that such Indebtedness, Disqualified Stock or Preferred Stock is not Incurred in contemplation of such acquisition or merger or to provide all or a portion of the funds or credit support required to consummate such acquisition or merger; provided, further, however, that after giving effect to such acquisition, merger or amalgamation acquisition and the Incurrence of such Indebtedness either:
(A1) the Company would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or would be greater than immediately prior to such acquisition, merger or amalgamation;
(15xvi) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five Business Days of its incurrenceIncurrence;
(16xvii) Indebtedness of the Company or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit FacilitiesAgreement, in a principal amount not in excess of the stated amount of such letter of creditcredit or bank guarantee;
(17xviii) Contribution Indebtedness;
(Axix) any guarantee by Indebtedness of the Company or a any Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business
(xx) Indebtedness of Foreign Subsidiaries of the Company in an amount not to exceed the greater of (x) $10 million or (y) 1.5% of Total Assets of all Foreign Subsidiaries at the time of such Incurrence, at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xx) shall cease to be deemed Incurred or outstanding for purposes of this clause (xx) but shall be deemed Incurred for purposes of Section 4.03(a) from and after the first date on which the Company or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xx)); and
(xxi) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of Indebtedness or other obligations the Company and Preferred Stock of any Restricted Subsidiary so long of the Company in an aggregate principal amount which, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xxi) does not exceed the greater of (x) $20 million and (y) 2.5% of Total Assets at the time of Incurrence, at any one time outstanding.
(c) Notwithstanding the foregoing, neither the Company nor any Guarantor may Incur any Indebtedness pursuant to Section 4.03(b) if the proceeds thereof are used, directly or indirectly, to repay, prepay, redeem, defease, retire, refund or refinance any Subordinated Indebtedness unless such Indebtedness shall be subordinated to the Securities or such Guarantor’s Guarantee, as applicable, to at least the same extent as such Subordinated Indebtedness. For purposes of determining compliance with this Section 4.03, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of Permitted Debt or is entitled to be Incurred pursuant to Section 4.03(a), the Company shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock in any manner that complies with this Section 4.03 and such item of Indebtedness, Disqualified Stock or Preferred Stock shall be treated as having been Incurred pursuant to only one of the clauses in Section 4.03(b) or pursuant to Section 4.03(a); provided that all Indebtedness under the Credit Agreement outstanding on the Issue Date shall be deemed to have been Incurred pursuant to clause (i) of Section 4.03(b) and the Company shall not be permitted to reclassify all or any portion of such Indebtedness. Accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.03. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which are otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the incurrence case may be, was in compliance with this Section 4.03.
(d) For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness incurred by such Restricted Subsidiary is permitted under was Incurred, in the terms case of this Indentureterm debt, oror first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving cre
Appears in 2 contracts
Sources: Indenture (Remington Arms Co Inc/), Indenture (Freedom Group, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Holdings III shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company Holdings III will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, that the Company Holdings III may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company Holdings III and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the CompanyHoldings III, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one timeamount, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of million outstanding at any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingone time;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee of the Notes;
(3) Indebtedness of the Company, the Issuer Holdings III and their its Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Company Holdings III or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred by the Company Holdings III or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company Holdings III or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company Holdings III or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a6)(a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company Holdings III and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company Holdings III to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Holdings III or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company Holdings III or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company Holdings III or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Holdings III or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Holdings III or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company Holdings III or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company Holdings III and Indebtedness, Disqualified Stock or Preferred Stock of the Company Holdings III or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company Holdings III since immediately after the Transaction Measurement Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies Holdings III or cash contributed to the capital of the Company Holdings III (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company Holdings III or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company Holdings III and Indebtedness, Disqualified Stock or Preferred Stock of the Company Holdings III or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b12)(b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company Holdings III or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a4.09(a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company Holdings III or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(DC) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Holdings III that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company Holdings III or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Holdings III that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company Holdings III or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company Holdings III or, subject to Section 4.09 (c4.09(c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Holdings III or any Restricted Subsidiary or merged or amalgamated into the Company Holdings III or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company Holdings III would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company Holdings III and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger acquisition or amalgamationmerger;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company Holdings III or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company Holdings III or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 2 contracts
Sources: Indenture (Freescale Semiconductor Holdings I, Ltd.), Indenture (Freescale Semiconductor Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued Applicable Measurement Period would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof foregoing limitations shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with time not to exceed the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (i) $5,250.0 million, plus 200.0 million and (ii) €750.0 million, plus (iii) in 40.0% of Consolidated EBITDA of the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, Issuer for the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingApplicable Measurement Period;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Guarantee thereof) (other than any Additional Notes, if any, or guarantees with respect thereto), including any Guarantee of the Notes;
(3) Indebtedness incurred pursuant to the Existing Facilities in an aggregate principal amount at any time outstanding not to exceed the maximum amount available under the terms of each Existing Facility as in effect on the Company, Issue Date;
(4) Indebtedness of the Issuer and their the Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1), (2) and (23) of this Section 4.09(b10.11(b));
(45) Indebtedness (including Capitalized Lease Obligations and Purchase Money Obligations), Disqualified Stock and Preferred Stock incurred by the Company Issuer or any of its the Restricted Subsidiaries, Subsidiaries to finance the purchase, lease lease, expansion, construction, development, replacement, maintenance, upgrade, installation, replacement, repair or improvement of property (real or personal) ), equipment or equipment that is used any other asset (including, but not limited to, MSRs, Servicing Advances, mortgages or useful other loans, mortgage-related securities or derivatives, consumer receivables, REO Assets, Residual Interests, mortgage-related receivables or other similar assets (or any interests in a Similar Businessany of the foregoing)), whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstandingassets; so long as provided that the Liens securing such Indebtedness exists may not extend to any other property owned by the Issuer or any of its Restricted Subsidiaries at the date time the Lien is incurred and the Indebtedness secured by the Lien may not be incurred more than 270 days after the latter of the acquisition or completion of the construction of the property subject to the Lien, provided, further that the amount of such purchaseIndebtedness does not exceed the fair market value of the assets developed, lease constructed, purchased, leased, repaired, maintained, expanded, replaced, upgraded, installed or improvement or is created within 270 days thereafterimproved with the proceeds of such Indebtedness;
(5a) Indebtedness incurred by the Company Issuer or any of its the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of businessbusiness or consistent with past practice, including letters of credit in favor of suppliers or trade creditors or in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance and (b) Indebtedness of the Issuer or any of its Restricted Subsidiaries as an account party in respect of letters of credit, bank guarantees or similar instruments in favor of suppliers, customers or other creditors issued in the ordinary course of business or consistent with past practice; provided, provided that upon the drawing aggregate principal amount of such letters Indebtedness under this clause (6)(b), when aggregated with the outstanding amount of credit or Indebtedness under clause (17) of this Section 10.11(b) incurred to refinance Indebtedness initially incurred in reliance on this clause (6)(b), shall not exceed at any one time outstanding the incurrence greater of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence(x) $50.0 million and (y) 10.0% of Consolidated EBITDA of the Issuer for the Applicable Measurement Period at any one time outstanding;
(67) Permitted Funding Indebtedness;
(8) Permitted Securitization Indebtedness and Indebtedness under Credit Enhancement Agreements;
(9) Non-Recourse Indebtedness;
(10) Indebtedness arising from agreements of the Company Issuer or its any of the Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts earn-out or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets assets, a Subsidiary or a Subsidiaryan Investment, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(711) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor Guarantor, excluding any Indebtedness in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business or consistent with past practice (other than and not in connection with the Issuer) borrowing of money), is expressly subordinated in right of payment (to the extent permitted by applicable law and it does not result in material adverse tax consequences) to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause;
(12) Indebtedness of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor, excluding any Indebtedness in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business or consistent with past practice (and not in connection with the borrowing of money), such Indebtedness is expressly subordinated in right of payment (to the extent permitted by applicable law and it does not result in material adverse tax consequences) to the Notes or the Guarantee of the Notes of such Guarantor; provided, further, that any subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause;
(13) shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such Preferred Stock or Disqualified Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock or Disqualified Stock (except to the Company Issuer or another Restricted Subsidiary or any pledge of its Restricted Subsidiariessuch Capital Stock constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed in each case to be an issuance of such shares of Preferred Stock or Disqualified Stock, as applicable (to the extent such Preferred Stock or Disqualified Stock is then outstanding), not permitted by this clause;
(1014) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk);
(1115) obligations in respect of self-insurance and obligations in respect of stays, customs, performance, indemnity, bid, appeal appeal, judgment, surety and surety other similar bonds or instruments and performance, bankers’ acceptance facilities and completion guarantees and similar obligations provided by the Company Issuer or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of businessbusiness or consistent with past practice or in connection with judgments that do not result in an Event of Default;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any of its Restricted Subsidiary equal Subsidiaries in an aggregate principal amount or liquidation preference up to 200.0% of the net cash proceeds received by the Company Issuer since immediately after the Transaction Issue Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies Issuer or cash contributed to the capital of the Company Issuer (in each case, other than Excluded Contributions or proceeds of Disqualified Stock or sales of Equity Interests to the Company Issuer or any of its Subsidiaries) as determined in accordance with clauses (3)(B3)(b) and (3)(C3)(c) of Section 4.07(a10.10(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b10.10(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1), (2) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, Issuer or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued pursuant to this clause (12)(b), does not at 16)(b) and any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this amount of Indebtedness under clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a17) of this Section 4.09(b), this clause (1310.11(b) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees refinance Indebtedness initially incurred in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of reliance on this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orclause
Appears in 2 contracts
Sources: Indenture (Mr. Cooper Group Inc.), Indenture (Mr. Cooper Group Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, to create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if (A) the Total Net Leverage Ratio of the Company and the Restricted Subsidiaries (including for the purposes of such calculation any Indebtedness, Disqualified Stock or Preferred Stock that is unsecured or secured by assets that are not Collateral), after giving effect to the incurrence of such Indebtedness, Disqualified Stock or Preferred Stock, as applicable, and the use of proceeds thereof, shall not exceed 5.10 to 1.00 or (B) the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available Test Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period); provided, further, however, that, on a pro forma basis, together with any amounts incurred or issued, as applicable, and outstanding by Non-Guarantor Subsidiaries pursuant to clauses (12)(b), (14)(a) and (18) of Section 4.09(b) hereof, no more than the greater of $750.0 million and 100.0% of LTM EBITDA for the most recently ended Test Period, of Indebtedness, Disqualified Stock or Preferred Stock at any one time outstanding and incurred or issued, as applicable, pursuant to this paragraph shall be incurred or issued, as applicable, by Non-Guarantor Subsidiaries; provided, however that the foregoing limitation shall not apply to Indebtedness of any Person that becomes a Restricted Subsidiary in connection with an acquisition or any other Investment not prohibited by the provisions of the covenant described in Section 4.07 hereof (or of any Person not previously a Restricted Subsidiary that is merged or consolidated with or into the Company or a Restricted Subsidiary) if such Indebtedness is outstanding prior to such Person becoming a Restricted Subsidiary and to the extent such Indebtedness is not incurred in contemplation of such acquisition or Investment.
(b) The provisions of Section 4.09(a) hereof shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer Company or any other of its Restricted Subsidiary Subsidiaries and Guarantees in respect of such Indebtedness and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof); provided that, and immediately after giving effect to any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtednessincurrence, up to an aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any all Indebtedness permitted incurred under this clause (1) or and outstanding at any portion thereof, one time does not exceed the aggregate amount sum of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing(a) $2,800.0 million plus (b) $750.0 million;
(2) the incurrence by the Issuer Company and any Guarantor of Indebtedness represented by the Notes issued on the Issue Date and any replacement Notes therefor (not including any Guarantee thereof) (other than any Additional Notes), including any Guarantee of the Notes;
(3) Indebtedness of the Company, the Issuer Company and their its Restricted Subsidiaries in existence on the Issue Date or the Merger Completion Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Company or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) ), equipment or equipment that is other assets that, in each case, are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amountassets; provided that, together with at the time of any Refinancing Indebtedness in respect thereof and all other such incurrence of Indebtedness, Disqualified Stock and/or or Preferred Stock issued (and outstanding under after giving pro forma effect thereto), the aggregate amount of Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (4), when aggregated with the outstanding amount of Refinancing Indebtedness in respect of Indebtedness, Disqualified Stock and Preferred Stock initially incurred in reliance on this clause (4), does not to exceed 4.0the greater of $300.0 million and 40.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at LTM EBITDA for the date of such purchase, lease or improvement or is created within 270 days thereaftermost recently ended Test Period;
(5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bank guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or created in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit health, disability or the incurrence of such Indebtednessother employee benefits or property, such obligations are reimbursed within 30 days following such drawing casualty or incurrenceliability insurance or self-insurance;
(6) Indebtedness arising from agreements consisting of the Company or its Restricted Subsidiaries providing for indemnificationobligations under deferred compensation (including indemnification obligations, adjustment obligations in respect of purchase priceprice adjustments, earnouts earn- outs, incentive non-competes and other contingent obligations) or other similar obligations, in each case, arrangements incurred or assumed in connection with the disposition of Acquisition, any business, assets acquisition or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all investment or any portion of such businessdisposition, assets or a Subsidiary for the purpose of financing such acquisition; providedin each case, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such dispositionprohibited hereunder;
(7) Indebtedness of the Company owing to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Non-Guarantor Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the NotesNotes (but only to the extent permitted by applicable law and not giving rise to adverse tax consequences); provided further further, that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs any such Indebtedness owing to a Restricted Non-Guarantor Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of Notes (but only to the Notes of such Guarantorextent permitted by applicable law and not giving rise to adverse tax consequences); provided further further, that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; , provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred StockStock not permitted by this clause (9);
(10) Hedging Obligations (excluding Hedging Obligations entered into incurred not for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds bonds, performance and completion guarantees, statutory, export or import indemnities, customs and completion guarantees (not for borrowed money) and similar obligations provided by the Company or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of businessbusiness or consistent with past practice;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Completion Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company or any Restricted Subsidiary (in each case, other than Excluded Contributions or proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B3)(b) and (3)(C3)(c) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b) and the outstanding amount of Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary which serves to refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under this clause (12)(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, does not, at the time of any such incurrence of Indebtedness (and after giving pro forma effect thereto), does not at any one time outstanding exceed the sum of (x) the greater of $900.0 450.0 million and 60.0% of LTM EBITDA for the most recently ended Test Period and (y) an additional amount of Indebtedness in lieu of Restricted Payments permitted under Section 4.07 hereof (it being understood that such Indebtedness shall be deemed a Restricted Payment for purposes of compliance with Section 4.07 hereof) (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b12)(b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a4.09(a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any ; provided that such Indebtedness, Disqualified Stock or Preferred Stock incurred as pursuant to this clause (12)(b) may be secured by a Lien on the Collateral that is pari passu with the Lien securing the Secured Obligations, secured by a Lien on the Collateral that is junior to the Lien securing the Secured Obligations, or may be unsecured or secured by assets that are not Collateral to the extent that such Lien is permitted under Section 4.12 hereof; provided, further, however, that, together with any amounts incurred or issued, as applicable, and outstanding by Non-Guarantor Subsidiaries pursuant to the second proviso in Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orclauses
Appears in 2 contracts
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectivelyeach instance thereof, an “incurrence”) ), with respect to any Indebtedness (including Acquired Indebtedness) ), and the Company will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company may incur Indebtedness indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof shall not apply toprohibit the incurrence of any of the following items of Indebtedness:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer Company or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof); provided, and however, that immediately after giving effect to any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtednessincurrence, up to an the then outstanding aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any all Indebtedness permitted under this clause (1) or any portion thereofdoes not exceed the sum of (x) $1,625.0 million plus (y) the maximum principal amount of additional Indebtedness that could be incurred such that after giving effect to such incurrence, the aggregate amount Consolidated First Lien Net Leverage Ratio of fees, underwriting discounts, premiums the Company would be no greater than 2.00 to 1.00 (calculated assuming that all Indebtedness incurred under this clause (1) is secured on a first priority basis and other costs and expenses Incurred in connection with without netting the cash proceeds of any such refinancingIndebtedness);
(2) the incurrence by the Issuer Company and any Subsidiary Guarantor of Indebtedness represented by under the Notes issued on the Issue Date (not including Guarantees thereof) and any Additional Notes), Notes (including any Guarantee of the NotesGuarantees thereof) issued in exchange for such Notes pursuant to a registration rights agreement;
(3) Indebtedness and Disqualified Stock of the Company, the Issuer Company and their its Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b))Date;
(4) Indebtedness (including in respect of Capitalized Lease Obligations), Disqualified Stock Synthetic Lease Obligations and Preferred Stock incurred by the Company purchase money obligations for fixed or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment capital assets; provided that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), does not to exceed 4.0% of Total Assets at any time outstanding; so long as encumber any property other than the property financed by such Indebtedness, other than proceeds and products thereof and either (a) the Indebtedness related thereto does not exceed the cost or fair market value, whichever is lower, of the property being financed and such Indebtedness exists at the date of such purchase, lease purchase or improvement transaction or is created within 270 365 days thereafterthereafter (for the avoidance of doubt, the purchase date for any asset shall be the later of the date of completion of installation and the beginning of the full productive use of such asset) or (b) the Indebtedness related thereto does not exceed the fair market value of the property being financed and after giving effect to the incurrence of any such Indebtedness and, after giving effect thereto (and the use of the proceeds therefrom), the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a);
(5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, death, disability or other employee benefits or property, casualty or liability insurance, or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations (a) are reimbursed within 30 days following such drawing or incurrenceincurrence or (b) are permitted to be incurred (and thereupon shall deemed to be incurred) pursuant to clause (4) above following the expiry of such 30 day period;
(6) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, including earnouts, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) however, that such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor (other than the Issuer) is expressly shall be subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any the Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)Subsidiary Guarantor, such Indebtedness is expressly shall be subordinated in right of payment to the Guarantee of the Notes of such Subsidiary Guarantor; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Indebtedness being held by a person other than the Company or a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed in each case to be an issuance of such shares of Preferred StockStock not permitted by this clause (9);
(10) Hedging Obligations Swap Contracts (excluding Hedging Obligations Swap Contracts entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness of the Company or any Restricted Subsidiary permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal appeal, stay, surety, customs and surety replevin bonds and performance and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencepreference that, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b12), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b))300.00 million;
(13) the incurrence or issuance by the Company or any Restricted SubsidiarySubsidiary of Indebtedness or Disqualified Stock, and the issuance by any Restricted Subsidiary of IndebtednessPreferred Stock, in each case that serves to refund, refinance, replace, renew, extend or defease any Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary or Preferred Stock which serves to refund of any Restricted Subsidiary incurred or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred issued as permitted under Section 4.09(a) hereof and clauses or clause (2), (3), ) or (4) and (12)(a) of this Section 4.09(b), this clause (13) and or clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock previously incurred or issued to so refund refund, refinance, replace, renew, extend or refinance defease such Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock Stock, including additional Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to pay premiums (including reasonable tender premiums), defeasance costs costs, accrued interest, fees and fees expenses in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which that is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock being refunded refunded, refinanced, replaced, renewed, extended or refinanced,defeased (or requires no or nominal payments in cash prior to the date that is 91 days after the Maturity Date of the Notes);
(B) to the extent such Refinancing Indebtedness refinances refunds, refinances, replaces, renews, extends or defeases (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereofSubordinated Indebtedness, such Refinancing Indebtedness is subordinated or pari passu in right of payment to the Notes or the Guarantee thereof at least to the same extent as the Indebtedness being refinanced refunded, refinanced, replaced, renewed, extended or refunded defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,; and
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the IssuerCompany;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the IssuerSubsidiary Guarantor; or
(iii) Indebtedness or Disqualified Stock of the Company or Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; and provided further that subclause (a) of this clause (13) will not apply to any refunding, refinancing, replacement, renewal, extension or defeasance of any Secured Indebtedness;
(14) (x) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred or issued to finance an acquisition (or other purchase of assets) or (y) existing Indebtedness, Disqualified Stock or Preferred Stock of Persons that are acquired by the Company or any Restricted Subsidiary or merged into or amalgamated into consolidated with the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; Indenture that is not incurred or issued in contemplation of such acquisition, merger or consolidation provided that in the case of (x) and (y) after giving effect to such acquisition, merger or amalgamation either
consolidation, either (Aa) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, or
the first sentence of this covenant or (Bb) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamationconsolidation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orand
Appears in 2 contracts
Sources: Indenture (Valvoline Inc), Indenture (Ashland Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectivelyan incidence thereof, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company Issuer will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis of the Issuer for the Company and its Restricted Subsidiaries’ Issuer’s most recently ended four fiscal quarters for which internal financial statements are available immediately Test Period preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued (or, in the case of Indebtedness under Designated Revolving Commitments, on the date such Designated Revolving Commitments are established after giving pro forma effect to the incurrence of the entire committed amount of Indebtedness thereunder, in which case such committed amount under such Designated Revolving Commitments may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this proviso) would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such fourTest Period; provided, further, Restricted Subsidiaries of the Issuer that are not Guarantors may not incur Indebtedness or issue Disqualified Stock or Preferred Stock under this paragraph if, after giving pro forma effect to such incurrence (including a pro forma application of the net proceeds therefrom), the aggregate amount of Indebtedness and Disqualified Stock and Preferred Stock of Restricted Subsidiaries that are not Guarantors incurred or issued pursuant to this paragraph then outstanding would exceed the greater of (x) $120.0 million and (y) 30% of Run-quarter periodRate Adjusted EBITDA of the Issuer for the most recently ended Test Period on the date of such incurrence or issuance.
(b) The provisions of Section 4.09(a) hereof shall will not apply to:
(1i) the incurrence of Indebtedness under pursuant to Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of drawn letters of credit and bankers’ acceptances thereunder (with drawn letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness ) in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with time outstanding not to exceed the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, sum of (iA) $5,250.0 million1,535.0 million and (B) the Permitted Incremental Amount; provided, that any Indebtedness incurred under this Section 4.09(b)(i) may be refinanced with additional Indebtedness in an amount equal to the principal of the Indebtedness so refinanced, plus any additional amount to pay premiums (ii) €750.0 millionincluding tender premiums), plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereofaccrued and unpaid interest, the aggregate amount of feesexpenses, underwriting discounts, premiums and other defeasance costs and expenses Incurred fees in connection with such refinancingtherewith;
(2ii) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes and the Guarantees (not including but excluding any Additional Notes), including any Guarantee of the Notes;
(3iii) the incurrence of Indebtedness of the Company, by the Issuer and their Subsidiaries any Restricted Subsidiary in existence on the Issue Date or the Merger Date (other than excluding Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b), but including Indebtedness in respect of Existing Mortgage Debt);
(4iv) (A) the incurrence of Attributable Indebtedness, (B) Indebtedness (including Capitalized Lease Obligations and Purchase Money Obligations), ) and Disqualified Stock incurred or issued by the Issuer or any Restricted Subsidiary and Preferred Stock incurred issued by the Company or any of its Restricted Subsidiaries, Subsidiary to finance (x) the construction of the Life Time Living facility in Henderson, Nevada and (y) the purchase, lease lease, expansion, construction, installation, replacement, repair or improvement of property (real or personal) ), equipment or equipment other assets, including assets that is are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof (excluding any Incremental Amounts) and all other Indebtedness, Disqualified Stock and/or Preferred Stock incurred or issued and outstanding under this clause (4)iv)(B)(y) at such time, not to exceed 4.0the greater of (1) $120.0 million and (2) 30% of Total Assets at any time outstanding; so long as such Indebtedness exists at Run-Rate Adjusted EBITDA of the Issuer for the most recently ended Test Period on the date of such purchaseincurrence and (C) any Refinancing Indebtedness thereof (it being understood that any Indebtedness, lease Disqualified Stock or improvement Preferred Stock incurred or is created within 270 days thereafterissued pursuant to this clause (iv) will cease to be deemed incurred, issued or outstanding for purposes of this clause (iv) but will be deemed incurred or issued for the purposes of Section 4.09(a), clause (3), (4) or (5) of the Permitted Incremental Amount under clause (i)(B) or clause (xxxi) of this Section 4.09(b) from and after the first date on which the Issuer or such Restricted Subsidiary could have incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under clause (3), (4) or (5) of the Permitted Incremental Amount under clause (i)(B) or clause (xxxi) of this Section 4.09(b) or Section 4.09(a) without reliance on this clause (iv));
(5A) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries Subsidiary constituting reimbursement obligations with respect to letters of credit credit, bank guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of businessbusiness or consistent with industry practice, including letters of credit in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, unemployment insurance or other social security legislation or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance and (B) the incurrence of such IndebtednessIndebtedness by the Issuer or any Restricted Subsidiary as an account party in respect of letters of credit, such obligations are reimbursed within 30 days following such drawing bank guarantees or incurrencesimilar instruments in favor of suppliers, trade creditors or other Persons incurred in the ordinary course of business or consistent with industry practice;
(6vi) the incurrence of Indebtedness arising from agreements of the Company Issuer or its any Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition;
(vii) the incurrence of Indebtedness or the issuance of Disqualified Stock of the Issuer to a Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Issuer or any Restricted Subsidiary); provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness for borrowed money owing or shares of Disqualified Stock issued to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the NotesNotes to the extent permitted by applicable law and it does not result in adverse tax consequences; provided further that provided, further, any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness or shares of Disqualified Stock (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall will be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness (to the extent such Indebtedness is then outstanding) or issuance of Disqualified Stock, as applicable, not permitted by this clause (vii);
(8) viii) the incurrence of Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Issuer or any Restricted Subsidiary); provided that if provided, any such Indebtedness for borrowed money incurred by a Guarantor incurs such Indebtedness and owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except Guarantor to the Company or another Restricted Subsidiary) shall be deemedextent permitted by applicable law and it does not result in adverse tax consequences; provided, in each casefurther, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any such subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien) will be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause (viii);
(ix) the issuance of Shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided, any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary that holds such Preferred Stock or Disqualified Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock or Disqualified Stock (except to the Company Issuer or another Restricted Subsidiary or any pledge of its Restricted Subsidiariessuch Indebtedness constituting a Permitted Lien) shall will be deemed deemed, in each case case, to be an issuance of such shares of Preferred StockStock or Disqualified Stock (to the extent such Preferred Stock is then outstanding) not permitted by this clause (ix);
(10x) the incurrence of Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk);
(11xi) obligations the incurrence of Obligations in respect of self-insurance and Obligations in respect of performance, bid, appeal and surety bonds and performance, banker’s acceptance facilities and completion guarantees guarantees, indemnifications and similar obligations provided by the Company Issuer or any Restricted Subsidiary or Obligations in respect of its Restricted Subsidiaries letters of credit, bank guarantees, non-recourse carve-outs or similar instruments related thereto, in each case in the ordinary course of businessbusiness or consistent with industry practice, including those incurred to secure health, safety and environmental obligations;
(12A) (a) the incurrence of Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal in an aggregate principal amount or liquidation preference at any one time outstanding of up to (1) 200.0% of the net cash proceeds received by the Company Issuer and its Restricted Subsidiaries since immediately after the Transaction Date June 10, 2015 from the issue or sale of Equity Interests of the Company Issuer and the Guarantors or any of its direct or indirect parent companies or cash contributed contributions to the capital of the Company Issuer and the Guarantors including through consolidation, amalgamation or merger (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company Issuer or any of its SubsidiariesSubsidiary) as determined in accordance with clauses (3)(Biv)(C)(2) and (3)(Civ)(C)3) of Section 4.07(a) hereof and (2) 100.0% of the principal amount of Indebtedness of the Issuer and its Subsidiaries that is converted into Equity Interests (other than Disqualified Stock or sales of Equity Interests to the Issuer or any Subsidiary or any Equity Interests that are preferred shares that bear a cash-pay dividend), to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b4.07(a); and
(B) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) the incurrence of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencepreference that, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued, as applicable, pursuant to this clause (12)(bxii)(B), does not at not, together with any one time outstanding Refinancing Indebtedness in respect thereof (excluding any Incremental Amounts), exceed the greater of (x) $900.0 120.0 million and (y) 30% of Run-Rate Adjusted EBITDA of the Issuer for the most recently ended Test Period on the date of such incurrence (and any Refinancing Indebtedness thereof); plus, in the event of any extension, replacement, refinancing, renewal or defeasance of any such Indebtedness or Disqualified Stock, an amount equal to the amount of any premium required to be paid under the terms of the instrument governing such Indebtedness, Disqualified Stock or Preferred Stock and any defeasance costs and any fees and expenses (including original issue discount, upfront fees or similar fees) incurred in connection with the issuance of such new Indebtedness or the extension, replacement, refunding, refinancing, renewal or defeasance of such Indebtedness or Disqualified Stock; it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued pursuant to this clause (12xii) (b) shall will cease to be deemed incurred incurred, issued or outstanding for purposes of this clause (12)(bxii) but shall will be deemed incurred or issued for the purposes of Section 4.09(a), clause (3), (4) hereof or (5) of the Permitted Incremental Amount under clause (i)(B) or clause (xxxi) of this Section 4.09(b) from and after the first date on which the Company Issuer or such Restricted Subsidiary could have incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under clause (3), (4) or (5) of the Permitted Incremental Amount under clause (i)(B) or clause (xxxi) of this Section 4.09 (a4.09(b) hereof or Section 4.09(a) without reliance on this clause (12)(b)xii);
(13xiii) the incurrence by the Company Issuer of Indebtedness or any Disqualified Stock or the incurrence by a Restricted Subsidiary, Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which that serves to refund refund, refinance, extend, replace, renew or refinance defease (collectively, “refinance” with “refinances,” “refinanced,” and “refinancing” having a correlative meaning) any Indebtedness, Indebtedness (including any Designated Revolving Commitments) incurred or Disqualified Stock or Preferred Stock incurred issued as permitted under Section 4.09(a) hereof and clauses (2ii), (3iii), (4iv) and (12)(a) of xii)(A)of this Section 4.09(b), this clause (13xiii) and clause clauses (14xiv), (xxiii) and (xxxi) of this Section 4.09(b) or any successive Refinancing Indebtedness with respect to any of the foregoing;
(xiv) the incurrence of:
(A) Indebtedness or Disqualified Stock of the Issuer or Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary incurred or issued to so refund finance an acquisition or refinance such Indebtedness, Disqualified Stock Investment (or Preferred Stock including additional Indebtedness, Disqualified Stock other purchase of assets) or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees that is assumed by the Issuer or any Restricted Subsidiary in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturitywith such acquisition or Investment; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,and
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Issuer or any Restricted Subsidiary or merged into, amalgamated or amalgamated into consolidated with the Company Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that provided, in the case of (A) and (B), either:
(1) after giving pro forma effect to such acquisition, merger amalgamation, consolidation or amalgamation either
merger, either (AI) the Company Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
Ratio Test; (BII) the Fixed Charge Coverage Ratio of for the Company and the Restricted Subsidiaries Issuer is equal to or greater than immediately prior to such acquisition, merger amalgamation, consolidation or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, ormerg
Appears in 2 contracts
Sources: Indenture (Life Time Group Holdings, Inc.), Indenture (Life Time Group Holdings, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued Applicable Measurement Period would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof foregoing limitations shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with time not to exceed the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (i) $5,250.0 million, plus 530.0 million and (ii) €750.0 million, plus (iii) in 50.0% of Consolidated EBITDA of the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, Issuer for the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingApplicable Measurement Period;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Guarantee thereof) (other than any Additional Notes, if any, or guarantees with respect thereto), including any Guarantee of the Notes;
(3) Indebtedness incurred pursuant to the Existing Facilities in an aggregate principal amount at any time outstanding not to exceed the maximum amount available under the terms of each Existing Facility as in effect on the Company, Issue Date;
(4) Indebtedness of the Issuer and their the Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1), (2) and (23) of this Section 4.09(b10.11(b));
(45) Indebtedness (including Capitalized Lease Obligations and Purchase Money Obligations), Disqualified Stock and Preferred Stock incurred by the Company Issuer or any of its the Restricted Subsidiaries, Subsidiaries to finance the purchase, lease lease, expansion, construction, development, replacement, maintenance, upgrade, installation, replacement, repair or improvement of property (real or personal) ), equipment or equipment that is used any other asset (including, but not limited to, MSRs, Servicing Advances, mortgages or useful other loans, mortgage-related securities or derivatives, consumer receivables, REO Assets, Residual Interests, mortgage-related receivables or other similar assets (or any interests in a Similar Businessany of the foregoing)), whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstandingassets; so long as provided that the Liens securing such Indebtedness exists may not extend to any other property owned by the Issuer or any of its Restricted Subsidiaries at the date time the Lien is incurred and the Indebtedness secured by the Lien may not be incurred more than 270 days after the latter of the acquisition or completion of the construction of the property subject to the Lien, provided, further that the amount of such purchaseIndebtedness does not exceed the fair market value of the assets developed, lease constructed, purchased, leased, repaired, maintained, expanded, replaced, upgraded, installed or improvement or is created within 270 days thereafterimproved with the proceeds of such Indebtedness;
(56) (a) Indebtedness incurred by the Company Issuer or any of its the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of businessbusiness or consistent with past practice or industry norm, including letters of credit in favor of suppliers or trade creditors or in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit performance, completion or the incurrence of such Indebtednesssurety bonds, such obligations are reimbursed within 30 days following such drawing health, disability or incurrence;
other employee benefits or property, casualty or liability insurance or self-insurance and (6b) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company Issuer or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability as an account party in respect of all such Indebtedness shall at no time exceed letters of credit, bank guarantees or similar instruments in favor of suppliers, customers or other creditors issued in the gross proceeds including non-cash proceeds (the fair market value ordinary course of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection business or consistent with such dispositionpast practice or industry norm;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Permitted Funding Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 2 contracts
Sources: Indenture (Mr. Cooper Group Inc.), Indenture (Mr. Cooper Group Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (ai) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Company shall not permit any of its Restricted Subsidiary Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and any Restricted Subsidiary that is a Loan Guarantor may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of the Company for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 2.0 to 1.00 (the “Fixed Charge Coverage Test”), 1.0 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a6.01(a) hereof shall not apply to:
(1i) the incurrence Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the ABL Credit Agreement and other Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount outstanding not to exceed the greater of (x) $1,500,000,000 at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then time outstanding, of and (iy) $5,250.0 million, plus the Borrowing Base;
(ii) €750.0 million, plus (iii) in the case Obligations and any Incremental Equivalent Debt of any refinancing of any Indebtedness permitted under this clause (1) the Company or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingLoan Guarantor;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee of the Notes;
(3iii) Indebtedness of the Company, the Issuer Company and their its Restricted Subsidiaries in existence on the Issue Date or the Merger Closing Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b)above);
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Company or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred Incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit and arrangements in respect of connection therewith, and Indebtedness in connection with workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6v) Indebtedness arising from agreements of the Company or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Restricted Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on accordance with the balance sheet will not be deemed to be reflected on such balance sheet for purposes terms of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such dispositionAgreement;
(7vi) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing owed to a Restricted Subsidiary that is not a Loan Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notesobligations of the Company under this Agreement; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence Incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9vii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10viii) Hedging Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Loan Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Loan Guarantor, such Indebtedness is subordinated in right of payment to the Loan Guaranty of such Loan Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(ix) Swap Obligations (excluding Hedging Obligations entered into of the Company or a Restricted Subsidiary that are not Incurred for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11x) obligations in respect of performance, bid, appeal appeal, surety and surety similar bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12xi) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of any Guarantee by the Company or any a Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue Indebtedness or sale of Equity Interests other obligations of the Company or any of its direct or indirect parent companies or cash contributed to Restricted Subsidiaries so long as the capital Incurrence of such Indebtedness is permitted under the Company (in each case, other than proceeds terms of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments this Agreement (other than Permitted Investments specified pursuant to clause (xviii) below); provided that if such Indebtedness is by its express terms subordinated in clauses (1) and (3) right of payment to the definition thereof) and (b) Indebtedness Loans or Disqualified Stock the Loan Guaranty of the Company and Indebtednesssuch Restricted Subsidiary, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereofas applicable, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference such Guarantee of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred Loan Guarantor with respect to such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, Indebtedness shall be subordinated in right of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) payment to the extent Loans or such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereofLoan Guarantor’s Loan Guaranty, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least as applicable, to the same extent as such Indebtedness is subordinated to the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes Loans or the Existing Secured Notes, or Refinancing Indebtedness Loan Guaranty of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoingRestricted Subsidiary, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(iixii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five (5) Business Days of its incurrenceIncurrence or the Incurrence of Indebtedness arising from customary cash management services in the ordinary course of business;
(16xiii) the Incurrence or issuance by the Company or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or the issuance of Preferred Stock of a Restricted Subsidiary of the Company which serves to extend, refund, refinance, renew, replace or defease any Indebtedness, Disqualified Stock or Preferred Stock of the Company or any of its Restricted Subsidiaries issued as permitted in Section 6.01(a) and clauses (ii), (iii), (xiv), (xv), (xvi) and (xviii) of this Section 6.01(b) or any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
a. has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced (which, for purposes hereof, shall be calculated as though no prepayments which reduce amortization on the Indebtedness being refunded or refinanced) and (y) 91 days following the Maturity Date;
b. has a Stated Maturity which is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or (y) 91 days following the Maturity Date;
c. to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Loans or the Loan Guaranty of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Loans or the Loan Guaranty of such Restricted Subsidiary, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;
d. is Incurred in an aggregate principal amount or face or liquidation amount (or if issued with original issue discount, an aggregate accreted price) that is equal to or less than the aggregate principal amount or face or liquidation amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced, renewed, replaced or defeased plus all accrued interest and premium (including any premium to be paid in connection with any tender offer, exchange offer or private purchase), fees, expenses and penalties Incurred in connection with such refinancing, refunding, renewing, replacement or defeasance; and
e. shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is not a Loan Guarantor that refinances Indebtedness of the Company or a Restricted Subsidiary that is a Loan Guarantor, or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary;
(xiv) Indebtedness of the Company or any of its Restricted Subsidiaries supported represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, Incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment (or other fixed assets) used in the business of the Company or any Restricted Subsidiary (where, in the case of a letter purchase, such purchase may be effected directly or through the purchase of credit issued the Capital Stock of the Person owning such property, plant and equipment), in the aggregate principal amount, including all Refinancing Indebtedness permitted to be Incurred under this Agreement to refund, refinance, renew or defease or replace any Indebtedness Incurred pursuant to the Credit Facilitiesprovision described in this clause (xiv), not to exceed $200,000,000, at any one time outstanding so long as the Indebtedness exists at the time of purchase described in a principal amount not in excess of the stated amount of such letter of creditthis clause (xiv) or is created within 270 days thereafter;
(17xv) to the extent constituting Indebtedness, obligations arising from any Permitted Bundled Contract Sale or Permitted Equipment Financing Contract Sale and any Guarantee incurred in the ordinary course of business by the Borrower or any of its Subsidiaries of the obligations of the Borrower or any subsidiary to a purchaser arising from a Permitted Bundled Contract Sale or Permitted Equipment Financing Contract Sale;
(Axvi) any guarantee the Incurrence of Acquired Indebtedness or the issuance of Disqualified Stock (or Preferred Stock in the case of a Restricted Subsidiary) by the Company or a Restricted Subsidiary to finance an Acquisition; provided that, after giving effect to the transactions that result in the Incurrence or issuance thereof, either (1) the Fixed Charge Coverage Ratio would be greater than immediately prior to such transactions or (2) the Company would be permitted to Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 6.01(a);
(xvii) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company or other obligations of any Restricted Subsidiary so long as other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xviii) Indebtedness incurred pursuant to a Permitted Foreign Restricted Subsidiary Factoring Facility;
(xix) Indebtedness or Disqualified Stock or Preferred Stock of the Company or any of its Restricted Subsidiaries in an aggregate principal amount, accreted value or face amount and with an aggregate liquidation preference not to exceed $200,000,000 at any one time outstanding, which Indebtedness may be included under a Credit Facility;
(xx) Indebtedness of a Foreign Restricted Subsidiary in an amount not to exceed $100,000,000 at any one time outstanding;
(xxi) Capital Lease Obligations or other Indebtedness arising from any Headquarters Transaction, including any lease of the Headquarters in any Sale and Leaseback Transaction relating thereto; and
(xxii) unsecured Indebtedness, or Indebtedness incurred solely by Liens described in clause (35) of the definition of “Permitted Liens”, maturing within one year of the date of incurrence thereof, and which is incurred to refinance, repay, redeem or repurchase the Timber Notes, which Indebtedness shall be in an aggregate principal amount (or if issued with original issue discount, an aggregate accreted value) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) of the Timber Notes plus all accrued interest and premiums (including any premium to be paid in connection with any tender offer, exchange offer or private repurchase), fees, expenses and prepayment penalties Incurred in connection with such refinancing, repayment, redemption or repurchase thereof (such Indebtedness, “Timber Notes Refinancing Indebtedness”). For purposes of determining compliance with this Section 6.01, in the event that an item, or a portion of such item, taken by itself, of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xxii) above or such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 6.01(a), the Company shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness in any manner that complies with this Section 6.01; provided that all Indebtedness under the ABL Credit Agreement outstanding on the Closing Date shall be deemed to have been Incurred pursuant to clause (i) of Section 6.01(b) and the Initial Term Loans shall be deemed to have been Incurred pursuant to clause (ii) of Section 6.01(b) and, in each case, the Company shall not be permitted to reclassify all or any portion of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms ABL Credit Agreement or the Initial Term Loans. Accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be deemed to be an Incurrence of Indebtedness for purposes of this IndentureSection 6.01. Guarantees of, oror obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness.
Appears in 2 contracts
Sources: Credit Agreement (Office Depot Inc), Credit Agreement (Office Depot Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (ai) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock and will (ii) the Company shall not permit any of its Restricted Subsidiary Subsidiaries (other than a Guarantor) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and any Restricted Subsidiary that is a Guarantor may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of the Company for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of the greater of $100.0 million or an amount equal to a percentage of eligible accounts receivables plus a percentage of the eligible raw materials, work in process and finished goods inventory (as set forth in the Credit Agreement) outstanding at any one time, when taken together with less the aggregate principal amount (orof any such Indebtedness permanently retired and, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing such repayment under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility, with the Net Proceeds from any Asset Sale applied from and after the Issue Date to reduce the outstanding amounts pursuant to Section 4.06, provided, however, that in no event shall the aggregate principal amount of any Indebtedness indebtedness permitted under pursuant to this clause (1a) or any portion thereof, the aggregate be reduced to an amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingless than $30.0 million;
(2ii) the incurrence Incurrence by the Issuer Company and any Guarantor the Guarantors of Indebtedness represented by the Notes Securities (not including any Additional NotesSecurities) and the Guarantee, as applicable (including Exchange Securities and related Guarantees thereof), including any Guarantee of the Notes;
(3iii) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b));
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred Purchase Money Indebtedness) Incurred by the Company or any of its Restricted Subsidiaries, Subsidiaries to finance (whether prior to or within 270 days after) the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and Indebtedness then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed 4.0the greater of $30.0 million or 15.0% of Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with in respect to letters of credit issued (i) workers’ compensation claims, self-insurance obligations, bankers’ acceptances, performance, surety and similar bonds and completion guarantees provided in the ordinary course of business, including letters of credit (ii) in respect of workers’ compensation claimsperformance bonds or similar obligations of the Company for or in connection with pledges, deposits or other Indebtedness payments made or given in connection with respect or to reimbursement type secure statutory, regulatory or similar environmental obligations, and (iii) arising from guarantees to suppliers, lessors, licensees, contractors, franchises or customers of obligations regarding workers’ compensation claims; provided, that upon incurred in the drawing ordinary course of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrencebusiness and not for money borrowed;
(6vi) Indebtedness arising from agreements of the Company or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the acquisition or disposition of any business, assets or a SubsidiarySubsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing owed to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notesobligations of the Company under the Securities; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, case to be an incurrence Incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary lending such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are Incurred in the ordinary course of business (excluding Hedging Obligations entered into and not for speculative purposes): (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases;
(xi) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount or liquidation preference of all other Indebtedness and Disqualified Stock then outstanding and Incurred pursuant to this clause (xi), does not exceed the greater of $35.0 million or 10% of Total Assets at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xi) shall cease to be deemed Incurred or outstanding for purposes of this clause (xi) but shall be deemed Incurred for purposes of Section 4.094.03(a) from and after the first date on which the Company, exchange rate risk or commodity pricing riskthe Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xi));
(11xii) any guarantee by the Company or a Guarantor of Indebtedness or other obligations of the Company or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by the Company or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Securities or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of such Guarantor with respect to such Indebtedness shall be subordinated in right of performancepayment to such Guarantor’s Guarantee with respect to the Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Guarantee of such Restricted Subsidiary, bid, appeal and surety bonds and completion guarantees provided as applicable;
(xiii) the Incurrence by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any a Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company which serves to refund, refinance or defease any of its direct Indebtedness Incurred or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a4.03(a) hereof and clauses (2ii), (3iii), (4iv), (xiii), (xiv), (xviii) and (12)(axix) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock Stock, including additional any Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,refinanced and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that was due on or after the date one year following the last maturity date of any Securities then outstanding were instead due on such date one year following the last date of maturity of any Securities then outstanding;
(B2) has a Stated Maturity which is no sooner than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or (y) one year following the last maturity date of any Securities then outstanding;
(3) to the extent such Refinancing Indebtedness refinances (ia) Indebtedness subordinated or pari passu junior to the Notes Securities or any the Guarantee thereofof such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes Securities or the Guarantee at least to the same extent of such Restricted Subsidiary, as the Indebtedness being refinanced or refunded applicable, or (iib) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,;
(C4) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium and fees Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is not a Subsidiary Guarantor that refinances Indebtedness of the Company or a Restricted Subsidiary that is a Subsidiary Guarantor, or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(6) in the case of any Refinancing Indebtedness in respect Incurred to refinance Indebtedness outstanding under clause (iv), (xviii) or (xix) of Indebtedness under the Senior Credit Facilitiesthis Section 4.03(b), the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required deemed to have been Incurred and to be incurred substantially contemporaneously with the related refinancing outstanding under such clause (iv), (xviii) or (xix) of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoingthis Section 4.03(b), as applicable, within 45 days following the incurrence and not this clause (xiii) for purposes of determining amounts outstanding under such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect clauses (iv), (xviii) and (xix) of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, andthis Section 4.03(b);
(D) shall not include:
(ixiv) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided provided, however, that such Indebtedness, Disqualified Stock or Preferred Stock is not Incurred in contemplation of such acquisition or merger or to provide all or a portion of the funds or credit support required to consummate such acquisition or merger; provided, further, however, that after giving effect to such acquisition, merger or amalgamation acquisition and the Incurrence of such Indebtedness either:
(A1) the Company would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or would be greater than immediately prior to such acquisition, merger or amalgamation;
(15xv) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xvi) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five Business Days of its incurrenceIncurrence;
(16xvii) Indebtedness of the Company or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit issued pursuant to the Credit FacilitiesAgreement, in a principal amount not in excess of the stated amount of such letter of credit;
(17xviii) Contribution Indebtedness;
(xix) (A) if the Company could Incur $1.00 of additional Indebtedness pursuant to Section 4.03(a) after giving effect to such borrowing, Indebtedness of Restricted Subsidiaries that are not Guarantors not otherwise permitted hereunder or (B) if the Company could not Incur $1.00 of additional Indebtedness pursuant to Section 4.03(a) after giving effect to such borrowing, Indebtedness of Restricted Subsidiaries that are not Guarantors Incurred for working capital purposes, provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (xix), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xix), does not exceed the greater of $20.0 million or 7% of Total Assets;
(xx) Indebtedness of the Company or any guarantee Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(xxi) the issuance and sale of Preferred Stock (a) by a Foreign Subsidiary in lieu of the issuance of non-voting common stock if (i) the laws of the jurisdiction of incorporation of such Subsidiary precludes the issuance of non-voting common stock and (ii) the preferential rights afforded to the holders of such Preferred Stock are limited to those customarily provide for in such jurisdiction in respect of the issuance of non-voting stock, (b) by a Restricted Subsidiary which is a joint venture with a third party which is not an Affiliate of the Company or a Restricted Subsidiary, and (c) by a Restricted Subsidiary pursuant to obligations with respect to the issuance or sale of Preferred Stock which exist at the time such Person becomes a Restricted Subsidiary and which were not created in connection with or in contemplation of such Person becoming a Restricted Subsidiary; and
(xxii) Permitted Affiliate Subordinated Indebtedness. For purposes of determining compliance with this Section 4.03, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xxii) above or is entitled to be Incurred pursuant to Section 4.03(a), the Company shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or other obligations in any manner that complies with this Section 4.03 and such item of any Restricted Subsidiary so long Indebtedness shall be treated as the incurrence having been Incurred pursuant to only one of such clauses or pursuant to Section 4.03(a); provided that all Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, oru
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Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company shall not, and shall not permit any of its the Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Company shall not permit any of the Restricted Subsidiary Subsidiaries (other than a Note Guarantor) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and any Restricted Subsidiary may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of the Company for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by the Company or the Restricted Subsidiaries of Indebtedness (including under any Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $1,500.0 million plus an aggregate additional principal amount of Consolidated Total Indebtedness constituting First Priority Lien Obligations outstanding at any one time, when taken together with time that does not cause the aggregate principal amount Consolidated Secured Debt Ratio (or, if issued with original issue discount, excluding the accreted valueNotes and Other Pari Passu Obligations from such calculation) of Existing Secured Notesthe Company to exceed 3.75 to 1.00, determined on a pro forma basis (including a pro forma application of the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus net proceeds therefrom);
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer Company and any Guarantor the Note Guarantors of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee of ) and the NotesNote Guarantees;
(3iii) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b)), including the Existing First Lien Notes and the guarantees thereof;
(4iv) (a) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company or any of its the Restricted Subsidiaries, Disqualified Stock issued by the Company or any of the Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries to finance (whether prior to or within 270 days after) the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) and (b) Acquired Indebtedness; in an aggregate principal amountamount that, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued and then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed 4.0the greater of $150.0 million and 5.0% of Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company or any of its the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the any acquisition or disposition of any business, assets or a SubsidiarySubsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing owed to a Restricted Subsidiary that is not a Note Guarantor (other than the Issuer) is expressly subordinated in right of payment to the obligations of the Company under the Notes; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence Incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Note Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is not a Note Guarantor, such Indebtedness is subordinated in right of payment to the Note Guarantee of such Note Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into that are not Incurred for speculative purposespurposes and are either: (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases or sales;
(11xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds, including surety bonds issued in respect of workers’ compensation claims, and completion guarantees provided by the Company or any of its Restricted Subsidiaries Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(12) (axii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, as applicable, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed the greater of $150.0 million and 5.0% of Total Assets at the time of Incurrence (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a) from and after the first date on which the Company, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii));
(xiii) any guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness or other obligations of the Company or any of the Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by the Company or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of such Note Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Note Guarantor’s Note Guarantee with respect to the Notes substantially to the same extent as such Indebtedness is subordinated to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary that serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(a) and clauses (ii), (iii), (iv), (xiv), (xv), and/or (xx) of this Section 4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including, in each case, any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums), expenses, defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”); provided, however, that such Refinancing Indebtedness:
(1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date one year following the maturity date of any Notes then outstanding were instead due on such date one year following the maturity date of such Notes;
(2) has a Stated Maturity which is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or defeased or (y) 91 days following the maturity date of the Notes;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;
(4) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium, expenses, costs and fees Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary that is not a Note Guarantor that refinances Indebtedness of the Company or a Restricted Subsidiary that is a Note Guarantor (unless such Restricted Subsidiary is an obligor with respect to such Indebtedness being refinanced), or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(6) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xx) of this Section 4.03(b); provided, further, that subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of (A) the Notes and (B) any Bank Indebtedness constituting First Priority Lien Obligations.
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or any of the Restricted Subsidiaries Incurred to finance an acquisition or (y) Persons that are acquired by the Company or any of the Restricted Subsidiaries or merged or amalgamated with or into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving effect to such acquisition, merger or amalgamation and the Incurrence of such Indebtedness either:
(1) the Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of Section 4.03(a); or
(2) the Fixed Charge Coverage Ratio would be equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company or any Restricted Subsidiary equal other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five Business Days of its Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to 200.0any Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference not exceeding at any time outstanding 200% of the net cash proceeds received by the Company and the Restricted Subsidiaries since immediately after the Transaction Issue Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies entity of the Company (which proceeds are contributed to the Company or a Restricted Subsidiary) or cash contributed to the capital of the Company (in each case, case other than proceeds of Disqualified Stock or sales of Equity Interests to to, or contributions received from, the Company or any of its Subsidiaries) ), as determined in accordance with clauses (3)(BB) and (3)(CC) of Section 4.07(a) hereof the definition of Cumulative Credit, to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b4.04(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and );
(bxx) Indebtedness of Foreign Subsidiaries for working capital purposes or Disqualified Stock of any other purposes; provided, however, that the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferenceof Indebtedness Incurred under this clause (xx), which other than for working capital purposes, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock Indebtedness then outstanding and incurred Incurred pursuant to this clause (12)(bxx), does not exceed the greater of $150.0 million and 5.0% of Total Assets at any one the time outstanding exceed $900.0 million of Incurrence (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Indebtedness Incurred under this clause (12) (bxx) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxx) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which the Company or such Restricted Foreign Subsidiary could have incurred Incurred such Indebtedness, Disqualified Stock or Preferred Stock Indebtedness under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (24.03(a), (3), (4) and (12)(a) the other provisions of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orInden
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Holdings III shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company Holdings III will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, that the Company Holdings III may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company Holdings III and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the CompanyHoldings III, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one timeamount, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of million outstanding at any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingone time;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee of the Notes;
(3) Indebtedness of the Company, the Issuer Holdings III and their its Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Company Holdings III or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred by the Company Holdings III or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company Holdings III or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company Holdings III or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a6)(a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company Holdings III and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company Holdings III to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Holdings III or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company Holdings III or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company Holdings III or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Holdings III or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Holdings III or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company Holdings III or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company Holdings III and Indebtedness, Disqualified Stock or Preferred Stock of the Company Holdings III or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company Holdings III since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies Holdings III or cash contributed to the capital of the Company Holdings III (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company Holdings III or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company Holdings III and Indebtedness, Disqualified Stock or Preferred Stock of the Company Holdings III or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b12)(b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company Holdings III or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a4.09(a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company Holdings III or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Existing Senior Notes, the Existing Senior Subordinated Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Existing Senior Notes, Existing Senior Subordinated Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Existing Senior Notes, Existing Senior Subordinated Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Existing Senior Notes, Existing Senior Subordinated Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Holdings III that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company Holdings III or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Holdings III that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company Holdings III or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company Holdings III or, subject to Section 4.09 (c4.09(c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Holdings III or any Restricted Subsidiary or merged or amalgamated into the Company Holdings III or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company Holdings III would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company Holdings III and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company Holdings III or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company Holdings III or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently contingently, or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, provided that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis for the Company Issuer and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter periodthe most recently ended four fiscal quarters for which internal financial statements are available; provided further that the amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors shall not (together with any Refinancing Indebtedness in respect thereof) exceed the greater of (a) $200.0 million and (b) 4.00% of Total Assets at any one time outstanding.
(ba) The provisions of Section 4.09(a) hereof shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereofthereof including any Indebtedness outstanding under a Credit Facility on the Issue Date); provided that immediately after giving effect to any such incurrence, and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an the then outstanding aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any all Indebtedness permitted under this clause (1) or does not exceed at any portion thereof, the aggregate one time an amount equal to (a) $2,775.0 million and (b) an additional amount of fees, underwriting discounts, premiums Secured Indebtedness provided that the Consolidated Secured Debt Ratio does not exceed 4.00 to 1.00 (after giving pro forma effect to the incurrence of such Indebtedness and other costs and expenses Incurred in connection with such refinancingthe application of the net proceeds therefrom);
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee ) and the Guarantees thereof in respect of the NotesNotes issued and outstanding on the Issue Date;
(3) Indebtedness of the Company, the Issuer and their its Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses clause (1) and or (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred or issued by the Company Issuer or any of its Restricted Subsidiaries, to finance the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets, in an aggregate principal amountamount or liquidation preference which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued then outstanding and outstanding together with any other Indebtedness incurred under this clause (4), does not to exceed 4.0the greater of (a) $200.0 million and (b) 4.00% of the Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterincurrence;
(5) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar facilities issued or entered into in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit performance or the incurrence of such Indebtednesssurety bonds, such obligations are reimbursed within 30 days following such drawing health, disability or incurrenceother employee benefits or property, casualty or liability insurance or self-insurance;
(6) Indebtedness arising from agreements of the Company Issuer or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or earn outs or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
provided that (Aa) such Indebtedness is not reflected on the balance sheet of the Company Issuer or any of its Restricted Subsidiaries (contingent obligations it being understood that Contingent Obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not shall be deemed not to be reflected on such balance sheet for purposes of this clause (6)) and (a)); and
(Bb) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value (as determined in good faith by the Issuer) of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company Issuer and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any the Restricted Subsidiary holding such Indebtedness of the Issuer ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred StockStock not permitted by this clause (9);
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing riskrisk (excluding Hedging Obligations entered into for speculative purposes);
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company Issuer or any of its Restricted Subsidiaries Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of businessbusiness or consistent with past practice;
(12) (a) Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which which, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued pursuant to this clause (12)(b12), does not at any one time outstanding exceed the greater of (a) $900.0 200.0 million and (b) 4.00% of Total Assets (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b12) but shall be deemed incurred or issued for the purposes of Section 4.09(a) hereof from and after the first date on which the Company Issuer or such Restricted Subsidiary could have incurred such Indebtedness, Indebtedness or issued such Disqualified Stock or Preferred Stock under Section 4.09 (a4.09(a) hereof without reliance on this clause (12)(b12));
(13) the incurrence or issuance by the Company Issuer or any Restricted Subsidiary, Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance refinance:
(a) any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a3) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b), or
(b) or any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to so refund or refinance such the Indebtedness, Disqualified Stock or Preferred Stock including described in clause (a) of this Section 4.09(b)(13), including, in each case, additional Indebtedness, Indebtedness incurred or Disqualified Stock or Preferred Stock incurred issued to pay premiums (including reasonable tender premiums), defeasance costs costs, accrued interest and fees and expenses in connection therewith (collectively, the “Refinancing Indebtedness”) prior to its respective maturity; provided, provided that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu passu, as the case may be, to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(DC) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the IssuerGuarantor; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; and provided further that subclause (A) of this clause (13) shall not apply to any refunding or refinancing of any Secured Indebtedness;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Issuer or any Restricted Subsidiary or merged into or amalgamated into consolidated with the Company Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that (i) such Indebtedness, Disqualified Stock or Preferred Stock is an aggregate principal amount or liquidation preference not to exceed the greater of (a) $100.0 million and (b) 2.0% of Total Assets at any time outstanding plus (ii) an unlimited amount of additional Indebtedness, Disqualified Stock or Preferred Stock if after giving effect to such acquisition, merger or amalgamation eitherconsolidation:
(Aa) the Company Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, or);
(Bb) the Fixed Charge Coverage Ratio of the Company Issuer and the its Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamationconsolidation; or
(c) the Consolidated Total Leverage Ratio of the Issuer and the Restricted Subsidiaries is equal to or less than (i) immediately prior to such acquisition, merger or consolidation or (ii) as of the consummation of the Acquisition;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of notice of its incurrence;
(16) Indebtedness of the Company Issuer or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (Aa) any guarantee by the Company Issuer or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Sources: Indenture (Microsemi Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company On and following the Effective Date, the Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) ), with respect to any Indebtedness (including Acquired Indebtedness) ), and the Company Issuer will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, provided that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company Issuer and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided further that the amount of Indebtedness (including Acquired Indebtedness) for borrowed money, Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors shall not (together with (x) any Refinancing Indebtedness in respect thereof incurred or issued by Restricted Subsidiaries that are not Guarantors and outstanding pursuant to clause Section 4.09(b)(13) and (y) the amount of Indebtedness for borrowed money, Disqualified Stock and Preferred Stock, incurred or issued by Restricted Subsidiaries that are not Guarantors pursuant to Section 4.09(b)(12)(b) and any Refinancing Indebtedness in respect thereof incurred or issued by Restricted Subsidiaries that are not Guarantors and outstanding pursuant to clause Section 4.09(b)(13)) exceed the greater of $700.0 million and 25% of EBITDA outstanding as of the time of any incurrence pursuant to this Section 4.09(a).
(b) The provisions of Section 4.09(a) hereof shall not apply to:
(1) the incurrence of (A) Indebtedness under Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Guarantor and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof); provided that, and immediately after giving effect to any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtednessincurrence or issuance, up to an the then-outstanding aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if of all Indebtedness incurred or issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) (including, for avoidance of doubt, clause (B) of this clause (1)) does not exceed the sum of (a) the greater of $2,100.0 million and 75% of EBITDA, plus (b) $6,000.0 million, plus (c) the maximum amount of Indebtedness such that, after giving pro forma effect to such incurrence (in a manner consistent with the calculation of the Fixed Charge Coverage Ratio), the Consolidated First Lien Debt Ratio of the Issuer does not exceed 2.75 to 1.00 (provided that, for purposes of determining the amount of Indebtedness that may be incurred pursuant to this subclause (c), all Indebtedness incurred pursuant to this clause (1) (including, for avoidance of doubt, clause (B) of this clause (1)) shall be deemed to be First Lien Debt) and (B) Indebtedness under Credit Facilities by the Issuer or any portion thereofGuarantor that serves to extend, the aggregate amount replace, refund, refinance, renew, or defease any Indebtedness originally incurred pursuant to clause (A) of this clause (1), including additional Indebtedness incurred or issued to pay premiums (including tender premiums), defeasance costs, and accrued interest, fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such extension, replacement, refunding, refinancing, renewal or defeasance;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Guarantee) (other than any Additional Notes), the Euro Secured Notes (including any Guarantee of guarantee thereof) (other than any “Additional Notes” as defined in the Euro Secured Notes Indenture) and the Unsecured Notes (including any guarantee thereof) (other than any “Additional Notes” as defined in the Unsecured Notes Indenture);
(3) Indebtedness of the Company, the Issuer and their its Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), ) incurred or Disqualified Stock and Preferred Stock incurred issued by the Company Issuer or any of its Restricted SubsidiariesSubsidiaries and Preferred Stock issued by any Restricted Subsidiary, to finance the purchaseacquisition, lease construction, repair, replacement, or improvement of property (real or personal) ), equipment, or equipment other fixed or capital assets that is are used or useful in a Similar Business; provided that such Indebtedness exists at the date of the applicable acquisition, whether through construction, repair, replacement, or improvement or is created within 365 days thereafter; provided, further that the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amountamount or liquidation preference of all such Indebtedness, Disqualified Stock or Preferred Stock, as applicable, incurred or issued pursuant to this clause (4), when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock, and Preferred Stock then outstanding and incurred pursuant to this clause (4), together with any Refinancing Indebtedness in respect thereof then outstanding and all other Indebtednessincurred pursuant to clause (13) below, Disqualified Stock and/or Preferred Stock issued and outstanding under does not as of the time of any incurrence pursuant to this clause (4), not to ) exceed 4.0the greater of $500.0 million and 18% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;EBITDA.
(5) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including letters of credit in respect of workers’ workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ workers compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company Issuer or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts earn-outs or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets assets, or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosed thereon)) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that that, if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosed thereon)) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another Restricted Subsidiary or any pledge of its Restricted Subsidiariessuch Preferred Stock constituting a Permitted Lien (but not foreclosed thereon)) shall be deemed in each case to be an issuance of such shares of Preferred StockStock not permitted by this clause (9);
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal appeal, and surety bonds and performance and completion guarantees and similar obligations provided by the Company Issuer or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees, or similar instruments related thereto, in each case, in the ordinary course of businessbusiness or consistent with past practice or industry practices;
(12) (a) Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock Stock, or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0100.0% of the net cash proceeds received by the Company since immediately Issuer after the Transaction Issue Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies Issuer or cash contributed to the capital of the Company Issuer (in each case, other than proceeds of Excluded Contributions or Disqualified Stock or sales of Equity Interests to the Company Issuer or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent hereof; provided, however, that (i) any such net cash proceeds received or cash have contributed shall not been applied pursuant to such clauses to make increase the amount available for making Restricted Payments to the extent any Indebtedness, Disqualified Stock or to make other Investments, payments Preferred Stock is issued or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments incurred in reliance on this clause (other than Permitted Investments specified in clauses (112)(a) and (3ii) any such net cash proceeds received or cash contributed that are applied to make any Restricted Payments shall be excluded for purposes of the definition thereof) incurring or issuing Indebtedness, Disqualified Stock or Preferred Stock pursuant to this clause (12)(a); and (b) Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock Stock, and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), together with any Refinancing Indebtedness in respect thereof then outstanding and incurred pursuant to clause (13) below, does not at any one time outstanding exceed the greater of $900.0 1,400.0 million and 50% of EBITDA; provided, that the amount of Indebtedness (it being understood that any including Acquired Indebtedness) for borrowed money, Disqualified Stock or Stock, and Preferred Stock that may be incurred or issued, as applicable, pursuant to this clause (1212)(b) by Restricted Subsidiaries that are not Guarantors shall not (btogether with (x) shall cease to be deemed any Refinancing Indebtedness in respect thereof incurred or issued by Restricted Subsidiaries that are not Guarantors and outstanding pursuant to clause (13) below and (y) the amount of Indebtedness for purposes borrowed money, Disqualified Stock and Preferred Stock, incurred or issued by Restricted Subsidiaries that are not Guarantors pursuant to Section 4.09(a) and any Refinancing Indebtedness in respect thereof incurred or issued by Restricted Subsidiaries that are not Guarantors and outstanding pursuant to clause (13) below) exceed the greater of $700.0 million and 25% of EBITDA outstanding at the time of any incurrence pursuant to this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company Issuer or any Restricted Subsidiary, Subsidiary of Indebtedness, Indebtedness or the issuance of Disqualified Stock or the issuance by any Restricted Subsidiary of Preferred Stock which serves to refund extend, replace, refund, refinance, renew, or refinance defease any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) ), and (12)(a12) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund extend, replace, refund, refinance, renew, or refinance defease such Indebtedness, Disqualified Stock Stock, or Preferred Stock including additional Indebtedness, Disqualified Stock Stock, or Preferred Stock incurred or issued to pay premiums (including reasonable tender premiums), defeasance costs and fees accrued interest, fees, and expenses in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, provided that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which that is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded extended, replaced, refunded, refinanced, renewed, or refinanceddefeased,
(B) to the extent such Refinancing Indebtedness refinances extends, replaces, refunds, refinances, renews or defeases (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee thereof at least to the same extent as the Indebtedness being refinanced extended, replaced, refunded, refinanced, renewed, or refunded defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(DC) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the IssuerGuarantor; or
(iii) Indebtedness or Disqualified Stock of the Issuer or Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock Stock, or Preferred Stock of an Unrestricted Subsidiary; and provided further that subclause (A) of this clause (13) shall not apply to any extension, replacement, refunding, refinancing, renewal, or defeasance of Indebtedness that matures prior to the Notes;
(14) (x) Indebtedness or Disqualified Stock of the Issuer or Indebtedness, Disqualified Stock Stock, or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred or issued to finance an acquisition (or other purchase of assets), merger, or consolidation or (y) Indebtedness, Disqualified Stock, or Preferred Stock of Persons that are acquired by the Company Issuer or any Restricted Subsidiary or merged into or amalgamated consolidated with or into the Company Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that that, after giving effect to such acquisition, merger merger, or amalgamation consolidation, if more than $200.0 million of Indebtedness, Disqualified Stock, or Preferred Stock, together with any Refinancing Indebtedness in respect thereof incurred and outstanding pursuant to clause (13) above, is at any time outstanding under this clause (14), either
(A) the Company Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orCovera
Appears in 1 contract
Sources: Indenture (Organon & Co.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company (i) Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) Holdings shall not permit any of its Restricted Subsidiary Subsidiaries (other than a Guarantor) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Holdings and any Restricted Subsidiary may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of Holdings for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by Holdings or its Restricted Subsidiaries of Indebtedness under any Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $2.675 billion plus an aggregate additional principal amount of Consolidated Total Indebtedness constituting First-Priority Lien Obligations outstanding at any one time, when taken together with time that does not cause the aggregate principal amount Consolidated Secured Debt Ratio of Holdings to exceed 3.75 to 1.00 determined on a pro forma basis (or, if issued with original issue discount, including a pro forma application of the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus net proceeds therefrom);
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer and any Guarantor the Guarantors of Indebtedness represented by the Notes or the Exchange Notes (not including any Additional Notes)) and the related Guarantees, including any Guarantee of the Notesas applicable;
(3iii) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or (after giving effect to the Merger Date Offering Transactions) (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b)), including the Existing Debentures and the Existing Junior Priority Notes and the guarantees thereof;
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company Holdings or any of its Restricted Subsidiaries, Subsidiaries to finance (whether prior to or within 270 days after) the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and Indebtedness then outstanding under that was Incurred (or deemed Incurred pursuant to clause (xiv) below) pursuant to this clause (4iv), does not to exceed 4.0the greater of $150.0 million and 5.0% of Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company Holdings or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtednesscredit, such obligations are reimbursed within 30 days following such drawing or incurrencedrawing;
(6vi) Indebtedness arising from agreements of the Company Holdings or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the disposition of any business, assets or a SubsidiarySubsidiary of Holdings in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that
(A) , at the time of closing, the amount of such Indebtedness is not reflected on determinable and, to the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all extent such Indebtedness shall at no time exceed thereafter becomes fixed and determined, the gross 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 by the Company and its Restricted Subsidiaries in connection with such dispositionIndebtedness is paid within 60 days thereafter;
(7vii) Indebtedness of the Company Holdings to a Restricted Subsidiary; provided provided, however, that any such Indebtedness owing owed to a Restricted Subsidiary that is not the Issuer or a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notesobligations of Holdings under its Guarantee; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)however, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided, however, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Holdings or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to Holdings or another Restricted Subsidiary; provided, however, that if a Guarantor Subsidiary Incurs such Indebtedness to a Restricted Subsidiary that is not the Issuer or a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided, further, however, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into that are not Incurred for speculative purposes: (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases;
(11xi) obligations in respect of performance, bid, appeal bid and surety bonds, including surety bonds issued in respect of workers’ compensation claims, and completion guarantees provided by the Company Holdings or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock Holdings or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which as applicable, which, when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed the greater of $150.0 million and 5.0% of Total Assets at any one the time outstanding exceed $900.0 million of Incurrence (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Indebtedness Incurred under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which Holdings, or the Company or such Restricted Subsidiary Subsidiary, as the case may be, could have incurred Incurred such Indebtedness, Disqualified Stock or Preferred Stock Indebtedness under Section 4.09 (a4.03(a) hereof without reliance on upon this clause (12)(bxii));
(13xiii) the incurrence any guarantee by the Company Holdings or any of its Restricted Subsidiaries of Indebtedness or other obligations of Holdings or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by Holdings or such Restricted Subsidiary is permitted under the terms of this Indenture; provided, however, that if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of Indebtednessany Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantor’s Guarantee with respect to the Notes substantially to the same extent as such Indebtedness is subordinated to the Notes or the Guarantee of such Guarantor, Disqualified Stock as applicable;
(xiv) the Incurrence by Holdings or Preferred Stock any of its Restricted Subsidiaries of Indebtedness which serves to refund refund, refinance or refinance defease any Indebtedness, Disqualified Stock or Preferred Stock incurred Indebtedness Incurred as permitted under Section 4.09(a4.03(a) hereof and clauses (2ii), (3iii), (4iv), (xiv), (xv) and and/or (12)(axix) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Indebtedness Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtednessincluding, Disqualified Stock or Preferred Stock incurred in each case, any Indebtedness Incurred to pay premiums (including reasonable tender premiums), expenses, defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity); provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity ofof the Indebtedness being refunded, refinanced or defeased and (y) the Indebtedness, Disqualified Stock or Preferred Stock Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness being refunded or refinanced,refinanced that were due on or after the date one year following the last maturity date of any Notes then outstanding were instead due on such date one year following;
(B2) has a Stated Maturity which is no earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or (y) one year following the last maturity date of any Notes then outstanding;
(3) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes or the Guarantee at least of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the same extent Notes or the Guarantee of such Restricted Subsidiary, as applicable;
(4) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium, expenses, costs and fees Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of Holdings that is not a Guarantor that refinances Indebtedness of Holdings or refunded another Guarantor (unless such Restricted Subsidiary is an obligor with respect to such Indebtedness being refinanced), or (iiy) Disqualified Stock Indebtedness of Holdings or Preferred Stock, such Refinancing a Restricted Subsidiary that refinances Indebtedness must be Disqualified Stock or Preferred Stock, respectively,of an Unrestricted Subsidiary; and
(C6) in the case of any Refinancing Indebtedness in respect Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of Indebtedness under the Senior Credit Facilitiesthis Section 4.03(b), the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required deemed to have been Incurred and to be incurred substantially contemporaneously with the related refinancing outstanding under such clause (iv) or (xx) of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoingthis Section 4.03(b), as applicable, within 45 days following the incurrence and not this clause (xiv) for purposes of determining amounts outstanding under such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect clauses (iv) and (xx) of the Senior Credit Facilitiesthis Section 4.03(b); provided, such Notesfurther, NXP Notes or Existing Secured Notehowever, or Refinancing Indebtedness that subclauses (1), (2) and (3) of any of the foregoing, as applicable, and
this clause (Dxiv) shall not include:
apply to any refunding or refinancing of (iA) Indebtednessthe Notes, Disqualified Stock (B) any Secured Indebtedness constituting a First-Priority Lien Obligation or Preferred Stock (C) any Existing Debentures consisting of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuerpollution control bonds;
(iixv) Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Holdings or any of its Restricted Subsidiary incurred Subsidiaries Incurred to finance an acquisition or (y) Persons that are acquired by the Company Holdings or any of its Restricted Subsidiary Subsidiaries or merged with or amalgamated into the Company Holdings or a Restricted Subsidiary in accordance with the terms of this Indenture; provided provided, however, that after giving effect to such acquisition, merger or amalgamation acquisition and the Incurrence of such Indebtedness either:
(A1) the Company Holdings would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or would be greater than immediately prior to such acquisition, merger or amalgamation;
(15xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to Holdings or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, provided however, that such Indebtedness is extinguished within five Business Days of its incurrenceIncurrence;
(16xviii) Indebtedness of the Company Holdings or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit FacilitiesAgreement, in a principal amount not in excess of the stated amount of such letter of credit;
(17xix) Contribution Indebtedness;
(Axx) Indebtedness of Foreign Subsidiaries of Holdings for working capital purposes or any guarantee other purposes, provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (xx) other than for working capital purposes, when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), does not exceed the greater of $150 million and 5.0% of Total Assets at the time of Incurrence;
(xxi) Indebtedness of Holdings or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, entered into in the ordinary course of business;
(xxii) Indebtedness Incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of Holdings or any Restricted Subsidiary not in excess, at any one time outstanding, of $7.5 million; and
(xxiii) Indebtedness issued by the Company Holdings or a Restricted Subsidiary to current or former officers, directors and employees thereof or any direct or indirect parent thereof, or their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of Holdings or any of its direct or indirect parent companies to the extent permitted under clause (iv) of the covenant described under Section 4.04(b).
(c) For purposes of determining compliance with this Section 4.03, (A) Indebtedness need not be Incurred solely by reference to one category of permitted Indebtedness described in clauses (i) through (xxiii) or pursuant to Section 4.03(a) but is permitted to be Incurred in part under any combination thereof and (B) in the event that an item of Indebtedness (or other obligations any portion thereof) meets the criteria of one or more of the categories of permitted Indebtedness described in clauses (i) through (xxiii) above or is entitled to be Incurred pursuant to Section 4.03(a), Holdings shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness (or any Restricted Subsidiary so long as portion thereof) in any manner that complies with this Section 4.03 and will only be required to include the incurrence amount and type of such item of Indebtedness incurred by (or any portion thereof) in one of the above clauses and such Restricted Subsidiary is permitted under item of Indebtedness shall be treated as having been Incurred pursuant to only one of such clauses or pursuant to Section 4.03(a). Accrual of interest, the accretion of accreted value, amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms or in the form of this Indenturecommon stock of Holdings, orthe payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, the accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solel
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly indirectly, liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company Issuer will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, provided that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)if, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter periodTest Period, the Fixed Charge Coverage Ratio of the Issuer for the Issuer’s most recently ended Test Period preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued (or, in the case of Indebtedness under Designated Revolving Commitments, on the date such Designated Revolving Commitments are established after giving pro forma effect to the incurrence of the entire committed amount of Indebtedness thereunder, in which case such committed amount under such Designated Revolving Commitments may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this proviso) would have been at least 2.00 to 1.00; provided that the amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors under this paragraph shall not exceed at any one time outstanding, in the aggregate, (together with all Indebtedness incurred under clause (23) below by Restricted Subsidiaries of the Issuer that are not Guarantors) the greater of (x) $250.0 million and (y) 55.0% of Consolidated EBITDA of the Issuer for the most recently ended Test Period (calculated on a pro forma basis).
(b) The provisions of Section 4.09(a) hereof shall will not apply to:
(1) the incurrence of Indebtedness under pursuant to Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness ) in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with not to exceed the aggregate principal amount sum of (or, if issued with original issue discount, A) the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (i) $5,250.0 million350.0 million and (ii) the Borrowing Base as of the date of such incurrence plus (B) the sum of (i) $1,800.0 million and (ii) the Permitted Incremental Incurrence Amount; provided that any Indebtedness incurred under this Section 4.09(b)(1) may be extended, replaced, refunded, refinanced, renewed or defeased (including through successive extensions, replacements, refundings, refinancings, renewals and defeasances) with new Indebtedness so long as the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the sum of (x) the principal amount (or accreted value, if applicable) of the Indebtedness being so extended, replaced, refunded, refinanced, renewed or defeased (and with respect to Indebtedness under Designated Revolving Commitments, including an amount equal to any unutilized Designated Revolving Commitments being refinanced to the extent permanently terminated at the time of incurrence of such Refinancing Indebtedness), plus (iiy) €750.0 millionany accrued and unpaid interest on the Indebtedness being refinanced, plus (iiiz) in the case amount of any refinancing tender premium or penalty or premium required to be paid under the terms of the instrument or documents governing such refinanced Indebtedness and any Indebtedness permitted under this clause defeasance costs and any fees and expenses (1) or any portion thereofincluding original issue discount, the aggregate amount of upfront fees, underwriting discountsunderwriting, premiums arrangement and other costs and expenses Incurred similar fees) incurred in connection with the incurrence of such new Indebtedness or the extension, replacement, refunding, refinancing, renewal or defeasance of such refinanced Indebtedness;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes and related Guarantees (not including but excluding any Additional Notes), including any Guarantee of the Notes;
(3) the incurrence of Indebtedness of the Company, by the Issuer and their Subsidiaries any Restricted Subsidiary in existence on the Issue Date or the Merger Date (other than excluding Indebtedness described in clauses (1Sections 4.09(b)(1) and (2) of this Section 4.09(b));
(4) (a) the incurrence of Attributable Indebtedness and (b) Indebtedness (including Capitalized Lease Obligations and Purchase Money Obligations), ) and Disqualified Stock incurred or issued by the Issuer or any Restricted Subsidiary and Preferred Stock incurred issued by the Company or any of its Restricted Subsidiaries, Subsidiary to finance the purchase, lease lease, expansion, construction, installation, replacement, repair or improvement of property (real or personal) ), equipment or equipment other assets, including assets that is are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof (excluding any Incremental Amounts) and all other Indebtedness, Disqualified Stock and/or Preferred Stock incurred or issued and outstanding under this clause (4)) at such time, not to exceed 4.0(as of the date such Indebtedness, Disqualified Stock and/or Preferred Stock is issued, incurred or otherwise obtained) the greater of (x) $250.0 million and (y) 55.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at Consolidated EBITDA of the date of such purchase, lease or improvement or is created within 270 days thereafterIssuer and the Restricted Subsidiaries for the most recently ended Test Period (calculated on a pro forma basis);
(5) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries Subsidiary (a) constituting reimbursement obligations with respect to letters of credit credit, bank guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of businessbusiness or consistent with industry practice and otherwise in compliance with the terms of this Indenture, including letters of credit in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, unemployment insurance or other social security legislation or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims; provided, that upon the drawing performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or (b) as an account party in respect of such letters of credit credit, bank guarantees or similar instruments in favor of suppliers, trade creditors or other Persons issued or incurred in the incurrence ordinary course of such Indebtedness, such obligations are reimbursed within 30 days following such drawing business or incurrenceconsistent with industry practice;
(6) the incurrence of Indebtedness arising from agreements of the Company Issuer or its any Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) the incurrence of Indebtedness of by the Company Issuer and owing to a Restricted Subsidiary or the issuance of Disqualified Stock of the Issuer to a Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to any Restricted Subsidiary); provided that any such Indebtedness for borrowed money owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the NotesNotes to the extent permitted by applicable law; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness or Disqualified Stock (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness or Disqualified Stock constituting a Permitted Lien) shall will be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness (to the extent such Indebtedness is then outstanding) or issuance of such Disqualified Stock (to the extent such Disqualified Stock is then outstanding) not permitted by this clause (7);
(8) the incurrence of Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Issuer or any Restricted Subsidiary); provided that if any such Indebtedness for borrowed money incurred by a Guarantor incurs such Indebtedness and owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except Guarantor to the Company or another Restricted Subsidiary) shall be deemedextent permitted by applicable law and it does not result in adverse tax consequences; provided, in each casefurther, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any such subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien) will be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause (8);
(9) the issuance of shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Issuer or any Restricted Subsidiary); provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary that holds such Preferred Stock or Disqualified Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock or Disqualified Stock (except to the Company Issuer or another Restricted Subsidiary or any pledge of its Restricted Subsidiariessuch Preferred Stock or Disqualified Stock constituting a Permitted Lien) shall will be deemed deemed, in each case case, to be an issuance of such shares of Preferred StockStock or Disqualified Stock (to the extent such Preferred Stock or Disqualified Stock is then outstanding) not permitted by this clause (9);
(10) the incurrence of Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk);
(11) the incurrence of obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance, banker’s acceptance facilities and completion guarantees and similar obligations provided by the Company Issuer or any Restricted Subsidiary or obligations in respect of its Restricted Subsidiaries letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of businessbusiness or consistent with industry practice, including those incurred to secure health, safety and environmental obligations;
(12) (a) the incurrence of Indebtedness or issuance of Disqualified Stock of the Company Issuer and the incurrence or issuance of Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal in an aggregate principal amount or liquidation preference up to 200.0% of the net cash proceeds received by the Company Issuer and its Restricted Subsidiaries since immediately after the Transaction Issue Date from the issue or sale of Equity Interests of the Company Issuer and the Guarantors or any of its direct or indirect parent companies or cash contributed contributions to the capital of the Company Issuer and the Guarantors including through consolidation, amalgamation or merger (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company Issuer or any of its SubsidiariesRestricted Subsidiary) as determined in accordance with clauses (3)(BSections 4.07(a)(3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b4.07(a) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses clause (1), (2) and or (3) of the definition thereof) and ); and
(b) the incurrence of Indebtedness or issuance of Disqualified Stock of the Company Issuer and the incurrence or issuance of Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencepreference that, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued, as applicable, pursuant to this clause (12)(b), together with any Refinancing Indebtedness in respect thereof (excluding any Incremental Amounts), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes as of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 is issued, incurred or otherwise obtained) (a) hereof without reliance on this clause (12)(b));
(13i) the incurrence by greater of (x) $275.0 million and (y) 60.0% of Consolidated EBITDA of the Company Issuer and the Restricted Subsidiaries for the most recently ended Test Period (calculated on a pro forma basis); plus, without duplication, (ii) in the event of any extension, replacement, refinancing, renewal or defeasance of any Restricted Subsidiary, of such Indebtedness, Disqualified Stock or Preferred Stock which serves Stock, an amount equal to refund or refinance (x) any accrued and unpaid interest on the Indebtedness, any accrued and unpaid dividends on the Preferred Stock, and any accrued and unpaid dividends on the Disqualified Stock being so refinanced, extended, replaced, refunded, renewed or Preferred Stock incurred as permitted defeased plus (y) the amount of any tender premium or penalty or premium required to be paid under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) the terms of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) the instrument or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance documents governing such Indebtedness, Disqualified Stock or Preferred Stock and any defeasance costs and any fees and expenses (including additional original issue discount, upfront fees, underwriting, arrangement and similar fees) incurred in connection with the issuance of such new Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums)or the extension, replacement, refunding, refinancing, renewal or defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that of such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded Stock;
(13) the incurrence or issuance by the Issuer of Refinancing Indebtedness or the incurrence or issuance by a Restricted Subsidiary of Refinancing Indebtedness that serves to refund, refinance, extend, replace, renew or defease (collectively, “refinance” with “refinances,” “refinanced,
” and “refinancing” having a correlative meaning) any Indebtedness (Bincluding any Designated Revolving Commitments) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated incurred or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred StockStock issued as permitted under Section 4.09(a) and Sections 4.09(b)(2), such (3) and (12)(a), this Section 4.09(b)(13) and Sections 4.09(b)(14), (30), (34) and (35) or any successive Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in with respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of to any of the foregoing, such Refinancing ;
(14) the incurrence or issuance of: (a) Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing or Disqualified Stock of the Senior Credit Facilities, such Notes, NXP Notes Issuer or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary incurred or issued to finance an acquisition or investment (or other purchase of the Company that is not a Guarantor assets); and (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(iib) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) of Persons that are acquired by the Company Issuer or any Restricted Subsidiary or merged into, amalgamated or amalgamated into consolidated with the Company Issuer or a Restricted Subsidiary in accordance with the terms of this IndentureIndenture or (y) that is assumed by the Issuer or any Restricted Subsidiary in connection with such acquisition or investment (or other purchase of assets); provided that after giving effect in an aggregate principal amount or liquidation preference, together with any Refinancing Indebtedness in respect of any of the foregoing (excluding any Incremental Amounts), not to such acquisition, merger or amalgamation either
exceed (A) the Company would be permitted to incur at least greater of $1.00 115.0 million and 25.0% of additional Indebtedness pursuant to Consolidated EBITDA plus (B) an unlimited amount so long as in the Fixed Charge Coverage Test set forth in Section 4.09(acase of this clause (B) hereof, oronly:
(Bi) the Fixed Charge Coverage Ratio of the Company and Issuer for the Restricted Subsidiaries is equal to or greater than immediately prior to Issuer’s most recently ended Test Period preceding the date on which such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such additional Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orincurr
Appears in 1 contract
Sources: Indenture (PQ Group Holdings Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued Applicable Measurement Period would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof foregoing limitations shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with time not to exceed the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (i) $5,250.0 million, plus 200.0 million and (ii) €750.0 million, plus (iii) in 40.0% of Consolidated EBITDA of the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, Issuer for the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingApplicable Measurement Period;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Guarantee thereof) (other than any Additional Notes, if any, or guarantees with respect thereto), including any Guarantee of the Notes;
(3) Indebtedness incurred pursuant to the Existing Facilities in an aggregate principal amount at any time outstanding not to exceed the maximum amount available under the terms of each Existing Facility as in effect on the Company, Issue Date;
(4) Indebtedness of the Issuer and their the Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1), (2) and (23) of this Section 4.09(b10.11(b));
(45) Indebtedness (including Capitalized Lease Obligations and Purchase Money Obligations), Disqualified Stock and Preferred Stock incurred by the Company Issuer or any of its the Restricted Subsidiaries, Subsidiaries to finance the purchase, lease lease, expansion, construction, development, replacement, maintenance, upgrade, installation, replacement, repair or improvement of property (real or personal) ), equipment or equipment that is used any other asset (including, but not limited to, MSRs, Servicing Advances, mortgages or useful other loans, mortgage-related securities or derivatives, consumer receivables, REO Assets, Residual Interests, mortgage-related receivables or other similar assets (or any interests in a Similar Businessany of the foregoing)), whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstandingassets; so long as provided that the Liens securing such Indebtedness exists may not extend to any other property owned by the Issuer or any of its Restricted Subsidiaries at the date time the Lien is incurred and the Indebtedness secured by the Lien may not be incurred more than 270 days after the latter of the acquisition or completion of the construction of the property subject to the Lien, provided, further that the amount of such purchaseIndebtedness does not exceed the fair market value of the assets developed, lease constructed, purchased, leased, repaired, maintained, expanded, replaced, upgraded, installed or improvement or is created within 270 days thereafterimproved with the proceeds of such Indebtedness;
(56) (a) Indebtedness incurred by the Company Issuer or any of its the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of businessbusiness or consistent with past practice, including letters of credit in favor of suppliers or trade creditors or in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit performance, completion or the incurrence of such Indebtednesssurety bonds, such obligations are reimbursed within 30 days following such drawing health, disability or incurrence;
other employee benefits or property, casualty or liability insurance or self-insurance and (6b) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company Issuer or any of its Restricted Subsidiaries (contingent obligations referred to as an account party in a footnote to financial statements and not otherwise reflected on respect of letters of credit, bank guarantees or similar instruments in favor of suppliers, customers or other creditors issued in the balance sheet will not be deemed to be reflected on ordinary course of business or consistent with past practice; provided that the aggregate principal amount of such balance sheet for purposes of Indebtedness under this clause (66)(b), when aggregated with the outstanding amount of Indebtedness under clause (17) of this Section 10.11(b) incurred to refinance Indebtedness initially incurred in reliance on this clause (a6)(b)); and
, shall not exceed at any one time outstanding the greater of (Bx) $50.0 million and (y) 10.0% of Consolidated EBITDA of the maximum assumable liability in respect of all such Indebtedness shall Issuer for the Applicable Measurement Period at no any one time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such dispositionoutstanding;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Permitted Funding Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Sources: Indenture (Mr. Cooper Group Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently contingently, or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, provided that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis for the Company Issuer and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter periodthe most recently ended four fiscal quarters for which internal financial statements are available; provided, further, that the amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors shall not (together with any Refinancing Indebtedness in respect thereof) exceed the greater of (x) $150.0 million and (y) 3.50% of Total Assets at any one time outstanding.
(b) The provisions of subsection (a) of this Section 4.09(a) hereof 4.09 shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof); provided that immediately after giving effect to any such incurrence, and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an the then outstanding aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any all Indebtedness permitted under this clause (1) or does not exceed at any portion thereof, the aggregate one time an amount equal to (a) $2,750.0 million and (b) an additional amount of fees, underwriting discounts, premiums Secured Indebtedness provided that the Consolidated Secured Debt Ratio does not exceed 3.50 to 1.00 (after giving pro forma effect to the incurrence of such Indebtedness and other costs and expenses Incurred in connection with such refinancingthe application of the net proceeds therefrom);
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by (a) the Notes (not including any Additional Notes), including any Guarantee ) and the Guarantees thereof in respect of the NotesNotes issued and outstanding on the Issue Date and (b) the 2023 Notes and the guarantees thereof outstanding on the Issue Date;
(3) Indebtedness of the Company, the Issuer and their its Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses clause (1) and or (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred or issued by the Company Issuer or any of its Restricted Subsidiaries, to finance the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets, in an aggregate principal amountamount or liquidation preference which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued then outstanding and outstanding together with any other Indebtedness incurred under this clause (4), does not to exceed 4.0the greater of (a) $200 million and (b) 4.9% of the Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterincurrence;
(5) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar facilities issued or entered into in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit performance or the incurrence of such Indebtednesssurety bonds, such obligations are reimbursed within 30 days following such drawing health, disability or incurrenceother employee benefits or property, casualty or liability insurance or self-insurance;
(6) Indebtedness arising from agreements of the Company Issuer or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligationsobligations (including earn-outs or deferred compensation arrangements), in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
provided that (Aa) such Indebtedness is not reflected on the balance sheet of the Company Issuer or any of its Restricted Subsidiaries (contingent obligations it being understood that Contingent Obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed not to be reflected on such balance sheet for purposes of this clause (6)) and (a)); and
(Bb) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value (as determined in good faith by the Issuer) of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company Issuer and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any the Restricted Subsidiary holding such Indebtedness of the Issuer ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another Restricted Subsidiary; , provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred StockStock not permitted by this clause (9);
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing riskrisk (excluding Hedging Obligations entered into for speculative purposes);
(11) obligations in respect of performance, bid, appeal supersedeas and surety bonds and completion guarantees and similar obligations provided by the Company Issuer or any of its Restricted Subsidiaries Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of businessbusiness or consistent with past practice;
(12) (a) Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which which, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b12), does not at any one time outstanding exceed the greater of (a) $900.0 250.0 million and (b) 6.0% of Total Assets (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b12) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company Issuer or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 subsection (a) hereof of this Section 4.09 without reliance on this clause (12)(b12));
(13) the incurrence or issuance by the Company Issuer or any Restricted Subsidiary, Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance refinance:
(a) any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under subsection (a) of this Section 4.09(a) hereof 4.09 and clauses (2), (3), (4) and (12)(a3) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b), or
(b) or any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to so refund or refinance such the Indebtedness, Disqualified Stock or Preferred Stock including described in clause (a) of this Section 4.09(b)(13), including, in each case, additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs costs, accrued interest and fees and expenses in connection therewith (collectively, the “Refinancing Indebtedness”) prior to its respective maturity; provided, provided that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) the principal amount (or accreted value, if applicable) of such Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness refinanced or refunded (plus all amounts to pay premiums (including tender premiums), defeasance costs, underwriting discounts, commissions, accrued interest and fees and expenses in connection therewith),
(C) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu in right of payment to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu in right of payment, as the case may be, to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the IssuerGuarantor; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Issuer or any Restricted Subsidiary or merged into or amalgamated into consolidated with the Company Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that (i) such Indebtedness, Disqualified Stock or Preferred Stock is an aggregate principal amount or liquidation preference not to exceed $100.0 million at any time outstanding plus (ii) an unlimited amount of additional Indebtedness, Disqualified Stock or Preferred Stock if after giving effect to such acquisition, merger or amalgamation consolidation, either:
(Aa) the Company Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in subsection (a) of this Section 4.09(a) hereof4.09, or
(Bb) the Fixed Charge Coverage Ratio of the Company Issuer and the its Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamationconsolidation;
(15) Indebtedness arising (a) from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of notice of its incurrence; and (b) as a result of the endorsement in the ordinary course of business of negotiable instruments in the course of collection;
(16) Indebtedness of the Company Issuer or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (Aa) any guarantee by the Company Issuer or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Sources: Indenture (Hill-Rom Holdings, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The (i) the Company shall not, and shall not permit any of its the Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Company shall not permit any of the Restricted Subsidiary Subsidiaries (other than any Guarantor) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and any Guarantor may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary that is not a Guarantor may incur Incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and or issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of the Company for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided, that the amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors, together with all Indebtedness, Disqualified Stock or Preferred Stock Incurred by Restricted Subsidiaries that are not Guarantors pursuant to Section 4.03(b)(xii) and (xvi)(A) below, together with any Refinancing Indebtedness in respect thereof, shall not exceed, in the aggregate, the greater of $360 million and 60% of Consolidated EBITDA as of the date on which such Indebtedness is Incurred (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount).
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by the Company or any Restricted Subsidiary of Indebtedness (including under any Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, thereunder) up to an aggregate principal amount outstanding at any one timethe time of Incurrence that, when taken together with the aggregate principal amount of Indebtedness outstanding under clause (orq) below at the time of Incurrence, if issued with original issue discount, does not exceed an amount equal to the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (ix) $5,250.0 million, plus 515 million and (y) the Borrowing Base;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer Company and any Guarantor the other Guarantors of Indebtedness represented by the Initial Notes (not including any Additional Notes), including any Guarantee of and the NotesGuarantees;
(3iii) Indebtedness of the CompanyIndebtedness, the Issuer Preferred Stock and their Subsidiaries in existence Disqualified Stock existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b));
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company or any of its Restricted SubsidiariesSubsidiary, Disqualified Stock issued by the Company or any Restricted Subsidiary and Preferred Stock issued by any Restricted Subsidiary to finance (whether prior to or within 270 days after) the purchaseacquisition, lease lease, construction, repair, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate assets) that, when aggregated with the principal amountamount or liquidation preference of all other Indebtedness, Disqualified Stock or Preferred Stock then outstanding and Incurred pursuant to this clause (iv), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) below, does not exceed at any one time outstanding the greater of $240 million and all other 40% of Consolidated EBITDA as of the date such Indebtedness is Incurred (plus, in the case of any Refinancing Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4the Additional Refinancing Amount), not to exceed 4.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5v) Indebtedness incurred Incurred by the Company or any of its Restricted Subsidiaries Subsidiary constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental law or permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company or its any Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of acquisition or purchase price, earnouts price or similar obligationsobligations (including earn-outs), in each case, incurred Incurred or assumed in connection with the Transactions, any Investments or any acquisition or disposition of any business, assets or a SubsidiarySubsidiary not prohibited by this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company to a Restricted Subsidiary; , provided that (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of the Company and their Subsidiaries) any such Indebtedness owing owed to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the obligations of the Company under the Notes; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to any pledge of such Indebtedness constituting a Permitted Lien but not the Company or another Restricted Subsidiarytransfer thereof upon foreclosure) shall be deemed, in each case, to be an incurrence Incurrence of such IndebtednessIndebtedness not permitted by this clause (vii);
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred StockStock not permitted by this clause (viii);
(10ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of the Company and its Subsidiaries), such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (ix);
(x) Hedging Obligations (excluding Hedging Obligations entered into that are not incurred for speculative purposespurposes but (A) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (C) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases or sales and, in each case, extensions or replacements thereof;
(11xi) obligations (including reimbursement obligations with respect to letters of credit, bank guarantees, warehouse receipts and similar instruments) in respect of performance, bid, appeal and surety bonds and bonds, completion guarantees and similar obligations provided by the Company or any of its Restricted Subsidiaries Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(12) (axii) Indebtedness or Disqualified Stock of the Company and or Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), together with any Refinancing Indebtedness in respect thereof incurred pursuant to clause (xv) below, does not exceed at any one time outstanding exceed the greater of $900.0 450 million and 75% of Consolidated EBITDA as of the date such Indebtedness is Incurred (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount) (it being understood that any Indebtedness Incurred pursuant to this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a) from and after the first date on which the Company, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii)); provided, that the amount of Indebtedness, Disqualified Stock and Preferred Stock that may be Incurred or issued, as applicable, pursuant to this clause (xii) by Restricted Subsidiaries that are not Guarantors, together with all Indebtedness, Disqualified Stock or Preferred Stock Incurred by Restricted Subsidiaries that are not Guarantors pursuant to the first paragraph of this covenant or clause (xvi)(A) below, and any Refinancing Indebtedness of Restricted Subsidiaries that are not Guarantors incurred in respect thereof, shall not exceed, in the aggregate, the greater of $360 million and 60% of Consolidated EBITDA (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);
(xiii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary in an aggregate principal amount or liquidation preference at any time outstanding, together with Refinancing Indebtedness in respect thereof incurred pursuant to clause (xv) hereof, not greater than 100.0% of the net cash proceeds received by the Company and the Restricted Subsidiaries since immediately after the Existing Notes Issue Date from the issue or sale of Equity Interests of the Company or any direct or indirect parent entity of the Company (which proceeds are contributed to the Company or a Restricted Subsidiary) or cash contributed to the capital of the Company (in each case other than proceeds of Disqualified Stock or sales of Equity Interests to, or contributions received from the Company or any of its Subsidiaries) to the extent such net cash proceeds or cash have not been applied to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.04(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount) (it being understood that any Indebtedness incurred pursuant to this clause (12) (bxiii) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(bxiii) but shall be deemed incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which the Company Company, or such the Restricted Subsidiary Subsidiary, as the case may be, could have incurred such Indebtedness, Disqualified Stock or Preferred Stock Indebtedness under Section 4.09 (a4.03(a) hereof without reliance on upon this clause (12)(bxiii));
(13xiv) the incurrence any guarantee by the Company or any Restricted Subsidiary of Indebtedness or other obligations of the Company or any Restricted Subsidiary so long as the Incurrence of such Indebtedness Incurred by the Company or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that (A) if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee with respect to such Indebtedness shall be subordinated in right of Indebtednesspayment to the Notes or such Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Notes or the Guarantee, as applicable, and (B) if such guarantee is of Indebtedness of the Company, such guarantee is Incurred in accordance with, or not in contravention of, Section 4.11 solely to the extent Section 4.11 is applicable;
(xv) the Incurrence by the Company or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock, or by any Restricted Subsidiary of Preferred Stock of a Restricted Subsidiary, that serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock which serves issued as permitted under Section 4.03(a) and clauses (i)(y), (ii), (iii), (iv), (xii), (xiii), (xv), (xvi), (xx), (xxiv) and (xxv) of this Section 4.03(b) up to refund the outstanding principal amount (or, if applicable, the liquidation preference, face amount, or refinance any Indebtednessthe like) or, if greater, committed amount (only to the extent the committed amount could have been Incurred on the date of initial Incurrence and was deemed Incurred at such time for the purposes of this Section 4.03) of such Indebtedness or Disqualified Stock or Preferred Stock, in each case at the time such Indebtedness was Incurred or Disqualified Stock or Preferred Stock incurred as permitted under was issued pursuant to Section 4.09(a4.03(a) hereof and or clauses (2i)(y), (3ii), (4iii), (iv), (xii), (xiii), (xv), (xvi), (xx), (xxiv) and (12)(axxv) of this Section 4.09(b4.03(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including Stock, plus any additional Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), accrued and unpaid interest, Additional Amounts, if any, expenses, defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced,refinanced that were due on or after the date that is one year following the last maturity date of any Notes then outstanding were instead due on such date (provided that this subclause (1) will not apply to any refunding or refinancing of any Secured Indebtedness or Indebtedness of non-Guarantors);
(B2) to the extent such Refinancing Indebtedness refinances (ia) Indebtedness subordinated or pari passu junior to the Notes or any Guarantee thereofa Guarantee, as applicable, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes or the Guarantee at least to the same extent Guarantee, as the Indebtedness being refinanced or refunded applicable, or (iib) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,;
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D3) shall not include:
include (ix) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of a Restricted Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of the Company or the Issuer;
a Guarantor, or (iiy) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of an Unrestricted Subsidiary;
(14xvi) Indebtedness, Disqualified Stock or Preferred Stock of (xA) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orRestr
Appears in 1 contract
Sources: Indenture (XPO Logistics, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock, and the Company will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary of its Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and any Subsidiary may incur Incur unsecured Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case, if the Fixed Charge Interest Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ Company’s most recently ended four full fiscal quarters for which internal financial statements are available Required Financial Statements have been delivered immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least is 2.00 to 1.00 or greater (the “Fixed Charge Coverage TestRatio Debt”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds the Proceeds therefrom had occurred occurred, at the beginning of such four-quarter period. Any Ratio Debt incurred must have a maturity date at least ninety-one (91) days after the maturity date of the New Third Lien Secured Notes.
(b) The provisions of Section 4.09(a) hereof shall foregoing limitations will not apply to:to (collectively, “Permitted Debt”):
(1i) the incurrence Incurrence of Indebtedness under pursuant to Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate outstanding principal amount, including all Indebtedness incurred to Refinance any Indebtedness originally Incurred pursuant to this Section 4.04(b)(i) (and any successive Permitted Refinancing Indebtedness), not to exceed an amount outstanding at any one time, when taken together with equal to the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (ix) $5,250.0 million1,505,000,000 and (y) the Revolving Borrowing Base (as defined in the Amended Credit Agreement or such similar term as defined in the Credit Facilities), plus unpaid accrued interest and premium (including tender premiums) thereon and underwriting discounts, defeasance costs, fees, commissions and expenses in connection with any Refinancings;
(ii) €750.0 million, plus Indebtedness (iiiincluding any Permitted Refinancing Indebtedness thereof) under the Second Lien Documents (including Additional New Second Lien Secured Notes) in an amount equal to $289,000,000 at any time outstanding and Indebtedness (including any Permitted Refinancing Indebtedness thereof) under the case of Third Lien Documents (including Additional New Third Lien Secured Notes) in an amount equal to $203,000,000 at any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingtime outstanding;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee of the Notes;
(3iii) Indebtedness of the Company, the Issuer Company and their its Subsidiaries in existence existing on the Issue Date or the Merger Date (including any Permitted Refinancing Indebtedness thereof) (other than Indebtedness described in clauses (1Section 4.04(b)(i) and (2) of this Section 4.09(b4.04(b)(ii));
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock Indebtedness with respect to mortgage financings and Preferred Stock incurred by the Company purchase money Indebtedness to finance all or any part of its Restricted Subsidiaries, to finance the purchase, lease lease, construction, installation, repair or improvement of property (real or personal) ), plant or equipment that is used or useful in a Similar Business, whether through other fixed or capital assets and Indebtedness arising from the direct purchase conversion of assets or the Capital Stock obligations of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of the Company or such Subsidiary, in an aggregate outstanding principal amount, including all Permitted Refinancing Indebtedness Incurred to Refinance any Indebtedness originally Incurred pursuant to this Section 4.04(b)(iv) (and any successive Permitted Refinancing Indebtedness), not to exceed the greater of (x) $190,000,000 and (y) 4.75% of Consolidated Total Assets as of the date any such Indebtedness is Incurred; provided that such Indebtedness is incurred within two hundred and seventy (270) days after the purchase, lease, construction, installation, repair or improvement of the property that is the subject of such Indebtedness;
(v) Indebtedness owed to (including obligations with in respect to of letters of credit issued in or bank guarantees or similar instruments for the ordinary course of businessbenefit of) any Person providing workers’ compensation, including letters of credit health, disability or other employee benefits (whether to current or former employees) or property, casualty or liability insurance or self-insurance in respect of workers’ compensation claimssuch items, or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance; provided, provided that upon the drawing Incurrence of such letters of credit or the incurrence of such Indebtednessany Indebtedness with respect to reimbursement obligations regarding workers’ compensation claims, such obligations are reimbursed within 30 not later than forty-five (45) days following such drawing or incurrenceIncurrence;
(6vi) Indebtedness arising from agreements of the Company or its Restricted any Subsidiaries providing for indemnification, earn-outs, adjustment of purchase price, earnouts or acquisition price or similar obligations, in each case, incurred or assumed Incurred in connection with the acquisition or disposition of any business, assets or a SubsidiarySubsidiary of the Company, other than guarantees Guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that;
(Avii) such intercompany Indebtedness is not reflected on the balance sheet of between or among the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company to a Restricted SubsidiarySubsidiaries; provided that any (x) such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor (other than the Issuerwill only be permitted by this Section 4.04(b)(vii) if at all times such Indebtedness is expressly subordinated in right of payment to the Notes; provided further that Third Lien Obligations with respect to the New Third Lien Secured Notes or Guarantee of such Subsidiary Guarantor, as applicable, and (y) any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary Guarantor lending such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall will be deemed, in each case, to be an incurrence Incurrence of such IndebtednessIndebtedness not permitted by this Section 4.04(b)(vii);
(8) viii) Indebtedness pursuant to Hedge Agreements;
(ix) Indebtedness in respect of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)performance bonds, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedbid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, in each case, provided in the ordinary course of business, including those Incurred to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09secure health, exchange rate risk or commodity pricing risk;
(11) safety and environmental obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12x) (a) Guarantees of Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or of any Restricted other Subsidiary equal permitted to 200.0% of be Incurred under the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each caseThird Lien Indenture, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make guarantees are Permitted Investments (other than Permitted Investments specified in clauses pursuant to clause (1) and (316) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15xi) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that so long as such Indebtedness (other than credit or purchase cards) is extinguished within five ten (10) Business Days after notification is received by the Company of its incurrence;
(16xii) [Reserved];
(xiii) Indebtedness consisting of (x) the financing of insurance premiums or (y) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(xiv) Cash Management Obligations and other Indebtedness in respect of Cash Management Services;
(xv) Indebtedness of Foreign Subsidiaries, together with any Permitted Refinancing Indebtedness Incurred by Foreign Subsidiaries to Refinance any Indebtedness originally Incurred pursuant to this Section 4.04(b)(xv) (and any successive Permitted Refinancing Indebtedness), in an aggregate outstanding principal amount not to exceed the greater of (x) $45,400,000 and (y) 1.125% of Consolidated Total Assets;
(xvi) Indebtedness in respect of short-term obligations to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services so long as such obligations are not in connection with the borrowing of money;
(xvii) Indebtedness representing deferred compensation or other similar arrangements Incurred by the Company or any Subsidiary (x) in the ordinary course of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, business or (y) in a principal amount not in excess of the stated amount of such letter of creditconnection with any Permitted Investment;
(17) (Axviii) any guarantee Permitted Refinancing Indebtedness Incurred to Refinance Indebtedness Incurred as Ratio Debt or under clause (xxii) or this clause (xviii);
(xix) customer deposits and advance payments received in the ordinary course of business from customers for goods purchased;
(xx) Indebtedness Incurred by the Company or any Subsidiary in connection with bankers’ acceptances, discounted bills of exchange, warehouse receipts or similar facilities or the discounting or factoring of receivables for credit management purposes, in each case Incurred or undertaken in the ordinary course of business;
(xxi) Indebtedness Incurred by the Company or any Subsidiary to the extent that the net proceeds thereof are promptly deposited with the Third Lien Trustee to satisfy and discharge the New Third Lien Secured Notes in accordance with this Third Lien Indenture;
(xxii) Additional Second Lien Obligations and Third Lien Obligations, provided that on a Restricted Subsidiary Pro Forma Basis Consolidated Secured Net Leverage Ratio is less than or equal to 3.0 to 1.0 and that Indebtedness incurred pursuant to this Section 4.04(b)(xxii) cannot be used to repurchase, repay, Refinance or exchange Old 2024 Notes, Old 2034 Notes or Old 2044 Notes; and
(xxiii) additional Indebtedness in an aggregate outstanding principal amount, including all Permitted Refinancing Indebtedness incurred to Refinance any Indebtedness originally Incurred pursuant to this Section 4.04(b)(xxiii) (and any successive Permitted Refinancing Indebtedness), not to exceed the greater of (x) $125,000,000 and (y) 3.125% of Consolidated Total Assets.
(c) For purposes of determining compliance with this Section 4.04, in the event that an item of Indebtedness (or any portion thereof) meets the criteria of more than one of the categories of Permitted Debt or is entitled to be Incurred as Ratio Debt, the Company may, in its sole discretion, at the time of Incurrence, combine, divide, classify or reclassify, or at any later time combine, divide, classify or reclassify, such item of Indebtedness (or any portion thereof) in any manner that complies with this covenant; provided that (x) all Indebtedness under the ABL/FILO Facility or guarantees thereof (and any Permitted Refinancing Indebtedness in respect thereof) will be deemed to have been Incurred pursuant to Section 4.04(b)(i) and (y) all Indebtedness under the New Third Lien Secured Notes or guarantees thereof (and any Permitted Refinancing Indebtedness in respect thereof) will be deemed to have been Incurred pursuant to 4.04(b)(ii), and, in each case of clauses (x) and (y) above, the Company will not be permitted to reclassify at any later date all or any portion of such Indebtedness. All Indebtedness originally Incurred under Section 4.04(b)(xxiii) will be automatically reclassified as Ratio Debt on the first date on which such Indebtedness would have been permitted to be Incurred by the obligor thereon as Ratio Debt. Accrual of interest, the accretion of accreted value, amortization of original issue discount, the payment of interest or dividends in the form of additional Indebtedness with the same terms, and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies, will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.04. Guarantees of, or obligations in respect of letters of credit relating to Indebtedness that is otherwise included in the determination of a particular amount of Indebtedness will not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this covenant.
(d) For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar equivalent principal amount of Indebtedness denominated in a foreign currency will be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt; provided that if such Indebtedness is Incurred to Refinance other obligations Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of any Restricted Subsidiary such refinancing, such U.S. dollar-denominated restriction will be deemed not to have been exceeded so long as the incurrence principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenturebeing refinanced (plus unpaid accrued interest and premium (including tender premiums) thereon and underwriting discounts, ordefeasance costs, fees, commissions and expenses in connection therewith).
Appears in 1 contract
Sources: Third Lien Indenture (Bed Bath & Beyond Canada L.P.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (ai) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Issuer shall not permit any of its Restricted Subsidiary Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer and any Restricted Subsidiary of the Issuer may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Debt to Adjusted EBITDA Ratio on a consolidated basis of the Issuer for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 be less than or equal to 6.75 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:to (collectively, “Permitted Debt”):
(1i) the incurrence Incurrence by the Issuer or its Restricted Subsidiaries of Indebtedness under the Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreements and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $4,000.0 million outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus ;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer and any Guarantor its Restricted Subsidiaries of Indebtedness represented by the ▇▇▇▇▇▇▇ Guaranteed Notes and the Notes (not including any Additional ▇▇▇▇▇▇▇ Guaranteed Notes or Additional Notes) and the Guarantees, as applicable (and any Exchange Notes and Guarantees thereof), including any Guarantee of the Notes;
(3iii) Indebtedness of the Company, the Issuer and their its Restricted Subsidiaries in existence existing on the Issue Date, including any Indebtedness Incurred on the Issue Date or and the Merger Date Oustanding ▇▇▇▇▇▇▇ Notes (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b)), and under any Backstop Credit Facility;
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer to finance (whether prior to or within 270 days after) the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued and then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed 4.0the greater of (x) $450.0 million and (y) 4% of Total Assets at any time outstanding; so long as such Indebtedness exists of the Issuer at the date time of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company Issuer or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the Transactions or the disposition of any business, assets or a SubsidiarySubsidiary of the Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the obligations of the Issuer under the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into other than for speculative purposes): (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; or (2) for the purpose of fixing or hedging currency exchange rate risk or commodity pricing riskwith respect to any currency exchanges;
(11xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and bonds, completion guarantees and the Lockheed Note provided by the Company Issuer or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) Issuer and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary of the Issuer not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencewhich, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed the greater of (x) $450.0 million and (y) 4% of Total Assets of the Issuer at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Incurred or issued under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which the Company Issuer or such the Restricted Subsidiary Subsidiary, as the case may be, could have incurred Incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a4.03(a) hereof without reliance on upon this clause (12)(bxii));
(13xiii) the incurrence any guarantee by the Company Issuer or a Restricted Subsidiary of Indebtedness or other obligations of the Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness or other Obligations by the Issuer or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of Indebtednesssuch guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Notes or such Guarantor’s Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Notes or the Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Issuer which serves to refund or refinance or defease any Indebtedness, Indebtedness Incurred or Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a4.03(a) hereof and clauses (2ii), (3iii), (4iv), (xiv), (xv), (xix), (xx) and (12)(axxii) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock Stock, including additional any Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,refinanced and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that was due on or after the date one year following the last maturity date of any Notes then outstanding were instead due on such date one year following the last date of maturity of any Notes then outstanding;
(B2) to the extent such Refinancing Indebtedness refinances (ia) Indebtedness subordinated or pari passu junior to the Notes or any Guarantee thereofNotes, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (iib) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,;
(C3) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium and fees Incurred in connection with such refinancing;
(4) shall not include Indebtedness of the Issuer or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(5) in the case of any Refinancing Indebtedness in respect Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of Indebtedness under the Senior Credit Facilitiesthis Section 4.03(b), the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required deemed to have been Incurred and to be incurred substantially contemporaneously with the related refinancing outstanding under such clause (iv) or (xx) of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoingthis Section 4.03(b), as applicable, within 45 days following the incurrence and not this clause (xiv) for purposes of determining amounts outstanding under such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect clauses (iv) and (xx) of the Senior Credit Facilitiesthis Section 4.03(b); and provided, such Notesfurther, NXP Notes or Existing Secured Note, or Refinancing Indebtedness that subclause (1) of any of the foregoing, as applicable, and
this clause (Dxiv) shall not include:apply to any refunding, refinancing or defeasance of (A) the Notes or (B) any Secured Indebtedness;
(ixv) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiary Subsidiaries or merged or amalgamated into the Company Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided provided, however, that such Indebtedness, Disqualified Stock or Preferred Stock is not Incurred in contemplation of such acquisition, merger or amalgamation; provided, further, however, that after giving effect to such acquisition, merger or amalgamation amalgamation, either:
(A1) the Company Issuer would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Debt to Adjusted EBITDA Ratio test set forth in Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Debt to Adjusted EBITDA Ratio of the Company and the Restricted Subsidiaries is Issuer would be less than or equal to or greater than such ratio immediately prior to such acquisition, merger or amalgamation;
(15xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse (except for Standard Securitization Undertakings) to the Issuer or any Restricted Subsidiary other than a Receivables Subsidiary;
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five Business Days of its incurrenceIncurrence;
(16xviii) Indebtedness of the Company Issuer or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the any Credit FacilitiesAgreement, in a principal amount not in excess of the stated amount of such letter of creditcredit or bank guarantee;
(17xix) Contribution Indebtedness;
(Axx) any guarantee by Indebtedness of Restricted Subsidiaries that are not Guarantors; provided, however, that the Company or a Restricted Subsidiary aggregate principal amount of Indebtedness Incurred under this clause (xx), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), does not exceed the greater of (x) $75.0 million and (y) 10% of the Total Assets of the Restricted Subsidiaries of Intelsat Sub Holdco that are not guarantors of any Indebtedness of the Issuer;
(xxi) Indebtedness of the Issuer or other obligations of any Restricted Subsidiary so long consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and
(xxii) Indebtedness of the Issuer or any of the Restricted Subsidiaries Incurred to repurchase or refinance any Specified PanAmSat Indebtedness.
(c) For purposes of determining compliance with this Section, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of one or more of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (i) through (xxii) above or is entitled to be Incurred pursuant to Section 4.03(a), the Issuer shall, in its sole discretion divide, classify or reclassify or later divide, classify or reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock in any manner that complies with this Section and such item of Indebtedness, Disqualified Stock or Preferred Stock shall be treated as having been Incurred pursuant to one or more of such clauses or pursuant to Section 4.03(a); provided that all Indebtedness under the Credit Agreements outstanding on the Issue Date shall be deemed to have been Incurred pursuant to Section 4.03(b)(i). Accrual of interest, the accretion of accreted value, amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the incurrence case may be, was in compliance with this Section. For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. Dollar Equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness incurred by was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. Dollar Equivalent), in the case of revolving credit debt; provided that if such Restricted Subsidiary Indebtedness is permitted under Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the terms of this Indenture, orapplicable U.S. dollar-denominated restriction to be exceeded if calculated at the r
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Sources: Indenture (Intelsat LTD)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued Applicable Measurement Period would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof foregoing limitations shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with time not to exceed the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (i) $5,250.0 million, plus 350.0 million and (ii) €750.0 million, plus (iii) in the case 14.0% of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingConsolidated Tangible Net Worth;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Guarantee thereof) (other than any Additional Notes, if any, or guarantees with respect thereto), including any Guarantee of the Notes;
(3) Indebtedness incurred pursuant to the Existing Facilities in an aggregate principal amount at any time outstanding not to exceed the maximum amount available under the terms of each Existing Facility as in effect on the Company, Issue Date;
(4) Indebtedness of the Issuer and their the Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1), (2) and (23) of this Section 4.09(b10.11(b));
(45) Indebtedness (including Capitalized Lease Obligations and Purchase Money Obligations), Disqualified Stock and Preferred Stock incurred by the Company Issuer or any of its the Restricted Subsidiaries, Subsidiaries to finance the purchase, lease lease, expansion, construction, development, replacement, maintenance, upgrade, installation, replacement, repair or improvement of property (real or personal) ), equipment or equipment that is used any other asset (including, but not limited to, MSRs, Servicing Advances, mortgages or useful other loans, mortgage-related securities or derivatives, consumer receivables, REO Assets, Residual Interests, mortgage-related receivables or other similar assets (or any interests in a Similar Businessany of the foregoing)), whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstandingassets; so long as provided that the Liens securing such Indebtedness exists may not extend to any other property owned by the Issuer or any of its Restricted Subsidiaries at the date time the Lien is incurred and the Indebtedness secured by the Lien may not be incurred more than 270 days after the latter of the acquisition or completion of the construction of the property subject to the Lien, provided, further that the amount of such purchaseIndebtedness does not exceed the fair market value of the assets developed, lease constructed, purchased, leased, repaired, maintained, expanded, replaced, upgraded, installed or improvement or is created within 270 days thereafterimproved with the proceeds of such Indebtedness;
(56) Indebtedness incurred by the Company Issuer or any of its the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of businessbusiness or consistent with past practice, including letters of credit in favor of suppliers or trade creditors or in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit performance, completion or the incurrence of such Indebtednesssurety bonds, such obligations are reimbursed within 30 days following such drawing health, disability or incurrenceother employee benefits or property, casualty or liability insurance or self-insurance;
(67) Permitted Funding Indebtedness;
(8) Permitted Securitization Indebtedness and Indebtedness under Credit Enhancement Agreements;
(9) Non-Recourse Indebtedness;
(10) Indebtedness arising from agreements of the Company Issuer or its any of the Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts earn-out or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets assets, a Subsidiary or a Subsidiaryan Investment, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(711) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor Guarantor, excluding any Indebtedness in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business or consistent with past practice (other than and not in connection with the Issuer) borrowing of money), is expressly subordinated in right of payment (to the extent permitted by applicable law and it does not result in material adverse tax consequences) to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause;
(12) Indebtedness of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor, excluding any Indebtedness in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business or consistent with past practice (and not in connection with the borrowing of money), such Indebtedness is expressly subordinated in right of payment (to the extent permitted by applicable law and it does not result in material adverse tax consequences) to the Notes or the Guarantee of the Notes of such Guarantor; provided, further, that any subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause;
(13) shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such Preferred Stock or Disqualified Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock or Disqualified Stock (except to the Company Issuer or another Restricted Subsidiary or any pledge of its Restricted Subsidiariessuch Capital Stock constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed in each case to be an issuance of such shares of Preferred Stock or Disqualified Stock, as applicable (to the extent such Preferred Stock or Disqualified Stock is then outstanding), not permitted by this clause;
(1014) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for and, to the purpose extent constituting Indebtedness, of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing riskobligations under Permitted Warrant Transactions;
(1115) obligations in respect of self-insurance and obligations in respect of stays, customs, performance, indemnity, bid, appeal appeal, judgment, surety and surety other similar bonds or instruments and performance, bankers’ acceptance facilities and completion guarantees and similar obligations provided by the Company Issuer or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of businessbusiness or consistent with past practice or in connection with judgments that do not result in an Event of Default;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any of its Restricted Subsidiary equal Subsidiaries in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued pursuant to this clause (16)(a) and any outstanding amount of Indebtedness under clause (17) of this Section 10.11(b) incurred to refinance Indebtedness initially incurred in reliance on this clause (16)(a), does not at any one time outstanding exceed, 200.0% of the net cash proceeds received by the Company Issuer since immediately after the Transaction Issue Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies Issuer or cash contributed to the capital of the Company Issuer (in each case, other than Excluded Contributions or proceeds of Disqualified Stock or sales of Equity Interests to the Company Issuer or any of its Subsidiaries) as determined in accordance with clauses (3)(B3)(b) and (3)(C3)(c) of Section 4.07(a10.10(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b10.10(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1), (2) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, Issuer or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued pursuant to this clause (12)(b16)(b) and any outstanding amount of Indebtedness under clause (17) of this Section 10.11(b) incurred to refinance Indebtedness initially incurred in reliance on this clause (16)(b), does not at any one time outstanding exceed the greater of (x) $900.0 250.0 million and (y) 10.0% of Consolidated Tangible Net Worth (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b16)(b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b16)(b) but shall be deemed incurred for the purposes of pursuant to Section 4.09(a10.11(a) hereof from and after the first date on which the Company Issuer or such Restricted Subsidiary could have incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b10.11(a));
(1317) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or the issuance by the Issuer or any Restricted Subsidiary, Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which that serves to refund refund, refinance, replace, renew, extend, defease, repay, prepay, redeem or refinance retire (collectively, “refinance” with “refinances,” “refinanced” and “refinancing” having a correlative meaning) any Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any of its Restricted Subsidiaries incurred or issued as permitted under Section 4.09(a10.11(a) hereof and clauses (2), (34), (45) and (12)(a) of this Section 4.09(b16), this clause (1317) and clause clauses (1418), (22), (23), (27) and (28) of this Section 4.09(b10.11(b) or any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay accrued but unpaid interest, dividends, premiums (including reasonable tender premiums), defeasance costs, underwriting discounts, fees, costs and expenses (including original issue discount, upfront fees or similar fees) in connection therewith with such refinancing (the “Refinancing Indebtedness”) on or prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded refinanced (or refinancedrequires no or nominal payments in cash (other than interest payments) prior to the date that is 91 days after the maturity date of the Notes),
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu in right of payment to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu in right of payment to the Notes or the such Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,, and
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) include Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of the Company Issuer or the Issuera Guarantor; provided, further, that subclause (A) of this clause (17) shall not apply to any refinancing of any Secured Indebtedness;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(1418) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, Issuer or a Restricted Subsidiary incurred or issued to finance an acquisition or Investment or (y) Persons that are acquired by the Company Issuer or any a Restricted Subsidiary or merged into, amalgamated with or amalgamated into consolidated with the Company Issuer or a Restricted Subsidiary in accordance with the terms of this IndentureIndenture (including designating an Unrestricted Subsidiary as a Restricted Subsidiary); provided that after giving pro forma effect to such Investment, acquisition, merger merger, amalgamation or amalgamation consolidation, either:
(A) the Company Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, 10.11(a); or
(B) the Fixed Charge Coverage Ratio of the Company Issuer and the its Restricted Subsidiaries is equal to or greater than immediately prior to such Investment, acquisition, merger merger, amalgamation or amalgamationconsolidation, provided, however, that on a pro forma basis, the aggregate amount of Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to clause (x) by any Restricted Subsidiaries that are not Guarantors, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued pursuant to this proviso and any outstanding amount of Indebtedness under clause (17) of this Section 10.11(b) incurred to refinance Indebtedness initially incurred in reliance on this proviso, does not at any one time outstanding exceed the greater of (i) $100.0 million and (ii) 4.0% of Consolidated Tangible Net Worth;
(15a) Cash Management Obligations, (b) Indebtedness in respect of netting services, overdraft protections and similar arrangements and other Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
and (16c) Indebtedness owed on a short-term basis of no longer than 30 days to banks and other financial institutions incurred in the ordinary course of business or consistent with past practice of the Company or any of Issuer and its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of with such letter of credit;
(17) (A) any guarantee by the Company banks or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
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Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company shall not, and shall not permit any of its the Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Company shall not permit any of the Restricted Subsidiary Subsidiaries (other than a Note Guarantor) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and any Restricted Subsidiary may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of the Company for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by the Company or the Restricted Subsidiaries of Indebtedness under any Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $1,500.0 million plus an aggregate additional principal amount of Consolidated Total Indebtedness constituting First Priority Obligations outstanding at any one time, when taken together with time that does not cause the aggregate principal amount Consolidated Secured Debt Ratio (or, if issued with original issue discount, excluding the accreted valueNotes and Other Pari Passu Obligations from such calculation) of Existing Secured Notesthe Company to exceed 3.75 to 1.00, determined on a pro forma basis (including a pro forma application of the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus net proceeds therefrom);
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer Company and any Guarantor the Note Guarantors of Indebtedness represented by the Notes (not including any Additional Notes) and the Note Guarantees (including the Exchange Notes and related guarantees thereof), including any Guarantee of the Notes;
(3iii) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b)), including the Existing Notes and the guarantees thereof;
(4iv) (a) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company or any of its the Restricted Subsidiaries, Disqualified Stock issued by the Company or any of the Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries to finance (whether prior to or within 270 days after) the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) and (b) Acquired Indebtedness; in an aggregate principal amountamount that, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued and then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed 4.0the greater of $150.0 million and 5.0% of Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company or any of its the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the Acquisition Transactions or any other acquisition or disposition of any business, assets or a SubsidiarySubsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing owed to a Restricted Subsidiary that is not a Note Guarantor (other than the Issuer) is expressly subordinated in right of payment to the obligations of the Company under the Notes; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence Incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Note Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is not a Note Guarantor, such Indebtedness is subordinated in right of payment to the Note Guarantee of such Note Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into that are not Incurred for speculative purposespurposes and are either: (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases or sales;
(11xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds, including surety bonds issued in respect of workers’ compensation claims, and completion guarantees provided by the Company or any of its Restricted Subsidiaries Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(12) (axii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, as applicable, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed the greater of $150.0 million and 5.0% of Total Assets at the time of Incurrence (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a) from and after the first date on which the Company, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii));
(xiii) any guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness or other obligations of the Company or any of the Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by the Company or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of such Note Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Note Guarantor’s Note Guarantee with respect to the Notes substantially to the same extent as such Indebtedness is subordinated to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary that serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(a) and clauses (ii), (iii), (iv), (xiv), (xv), and/or (xx) of this Section 4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including, in each case, any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums), expenses, defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”); provided, however, that such Refinancing Indebtedness:
(1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date one year following the maturity date of any Notes then outstanding were instead due on such date one year following the maturity date of such Notes;
(2) has a Stated Maturity which is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or defeased or (y) 91 days following the maturity date of the Notes;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;
(4) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium, expenses, costs and fees Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary that is not a Note Guarantor that refinances Indebtedness of the Company or a Restricted Subsidiary that is a Note Guarantor (unless such Restricted Subsidiary is an obligor with respect to such Indebtedness being refinanced), or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(6) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xx) of this Section 4.03(b); provided, further, that subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of(A) the Notes and (B) any Bank Indebtedness constituting First Priority Obligations.
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or any of the Restricted Subsidiaries Incurred to finance an acquisition or (y) Persons that are acquired by the Company or any of the Restricted Subsidiaries or merged or amalgamated with or into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving effect to such acquisition, merger or amalgamation and the Incurrence of such Indebtedness either:
(1) the Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of Section 4.03(a); or
(2) the Fixed Charge Coverage Ratio would be greater than immediately prior to such acquisition, merger or amalgamation;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company or any Restricted Subsidiary equal other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five Business Days of its Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to 200.0the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference not exceeding at any time outstanding 200% of the net cash proceeds received by the Company and the Restricted Subsidiaries since immediately after the Transaction Issue Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies entity of the Company (which proceeds are contributed to the Company or a Restricted Subsidiary) or cash contributed to the capital of the Company (in each case, case other than proceeds of Disqualified Stock or sales of Equity Interests to to, or contributions received from, the Company or any of its Subsidiaries) ), as determined in accordance with clauses (3)(BB) and (3)(CC) of Section 4.07(a) hereof the definition of Cumulative Credit, to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b4.04(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and );
(bxx) Indebtedness of Foreign Subsidiaries for working capital purposes or Disqualified Stock of any other purposes; provided, however, that the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferenceof Indebtedness Incurred under this clause (xx), which other than for working capital purposes, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock Indebtedness then outstanding and incurred Incurred pursuant to this clause (12)(bxx), does not exceed the greater of $150.0 million and 5.0% of Total Assets at any one the time outstanding exceed $900.0 million of Incurrence (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Indebtedness Incurred under this clause (12) (bxx) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxx) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which the Company or such Restricted Foreign Subsidiary could have incurred Incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orS
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Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued Applicable Measurement Period would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof foregoing limitations shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with time not to exceed the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (i) $5,250.0 million, plus 530.0 million and (ii) €750.0 million, plus (iii) in 50.0% of Consolidated EBITDA of the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, Issuer for the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingApplicable Measurement Period;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Guarantee thereof) (other than any Additional Notes, if any, or guarantees with respect thereto), including any Guarantee of the Notes;
(3) Indebtedness incurred pursuant to the Existing Facilities in an aggregate principal amount at any time outstanding not to exceed the maximum amount available under the terms of each Existing Facility as in effect on the Company, Issue Date;
(4) Indebtedness of the Issuer and their the Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1), (2) and (23) of this Section 4.09(b10.11(b));
(45) Indebtedness (including Capitalized Lease Obligations and Purchase Money Obligations), Disqualified Stock and Preferred Stock incurred by the Company Issuer or any of its the Restricted Subsidiaries, Subsidiaries to finance the purchase, lease lease, expansion, construction, development, replacement, maintenance, upgrade, installation, replacement, repair or improvement of property (real or personal) ), equipment or equipment that is used any other asset (including, but not limited to, MSRs, Servicing Advances, mortgages or useful other loans, mortgage-related securities or derivatives, consumer receivables, REO Assets, Residual Interests, mortgage-related receivables or other similar assets (or any interests in a Similar Businessany of the foregoing)), whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstandingassets; so long as provided that the Liens securing such Indebtedness exists may not extend to any other property owned by the Issuer or any of its Restricted Subsidiaries at the date time the Lien is incurred and the Indebtedness secured by the Lien may not be incurred more than 270 days after the latter of the acquisition or completion of the construction of the property subject to the Lien, provided, further that the amount of such purchaseIndebtedness does not exceed the fair market value of the assets developed, lease constructed, purchased, leased, repaired, maintained, expanded, replaced, upgraded, installed or improvement or is created within 270 days thereafterimproved with the proceeds of such Indebtedness;
(56) (a) Indebtedness incurred by the Company Issuer or any of its the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of businessbusiness or consistent with past practice, including letters of credit in favor of suppliers or trade creditors or in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit performance, completion or the incurrence of such Indebtednesssurety bonds, such obligations are reimbursed within 30 days following such drawing health, disability or incurrence;
other employee benefits or property, casualty or liability insurance or self-insurance and (6b) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company Issuer or any of its Restricted Subsidiaries (contingent obligations referred to as an account party in a footnote to financial statements and not otherwise reflected on respect of letters of credit, bank guarantees or similar instruments in favor of suppliers, customers or other creditors issued in the balance sheet will not be deemed to be reflected on ordinary course of business or consistent with past practice; provided that the aggregate principal amount of such balance sheet for purposes of Indebtedness under this clause (66)(b), when aggregated with the outstanding amount of Indebtedness under clause (17) of this Section 10.11(b) incurred to refinance Indebtedness initially incurred in reliance on this clause (a6)(b)); and
, shall not exceed at any one time outstanding the greater of (Bx) $105.0 million and (y) 10.0% of Consolidated EBITDA of the maximum assumable liability in respect of all such Indebtedness shall Issuer for the Applicable Measurement Period at no any one time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such dispositionoutstanding;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Permitted Funding Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Sources: Indenture (Mr. Cooper Group Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectivelyeach instance thereof, an “incurrence”) ), with respect to any Indebtedness (including Acquired Indebtedness) ), and the Company will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof shall not apply toprohibit the incurrence of any of the following items of Indebtedness:
(1) the incurrence of Indebtedness under pursuant to Credit Facilities by the Company, the Issuer Company or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together time outstanding not to exceed the greater of (a) $3,200 million and (b) 375.0% of the EBITDA of the Company and its Restricted Subsidiaries on a consolidated basis for the most recently ended four fiscal quarters ending immediately prior to the date of such incurrence for which internal financial statements are available determined on a pro forma basis in a manner consistent with the aggregate principal amount (or, if issued with original issue discount, the accreted value) definition of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingFixed Charge Coverage Ratio;
(2) the incurrence by the Issuer Company and any Subsidiary Guarantor of Indebtedness represented by under the Notes issued on the Original Issue Date (not including Guarantees thereof) and any Additional Notes), Notes (including any Guarantee of the NotesGuarantees thereof) issued in exchange for such Notes pursuant to a registration rights agreement;
(3) Indebtedness and Disqualified Stock of the Company, the Issuer Company and their its Restricted Subsidiaries in existence on the Original Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b))Date;
(4) Indebtedness (including Capitalized Lease Obligations), ) and Disqualified Stock and Preferred Stock incurred or issued by the Company or any of its Restricted Subsidiaries, and the issuance of Preferred Stock by any Restricted Subsidiary of the Company, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the purchase of Capital Stock of any Person owning such assets assets, in an aggregate principal amount, together with any amount at the date of such incurrence (including all Refinancing Indebtedness in respect thereof and all incurred to refinance any other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under Indebtedness incurred pursuant to this clause (4), ) not to exceed 4.0the greater of $300.0 million and 4.75% of Total Assets at (as adjusted to give pro forma effect to any time outstandingassets purchased with the proceeds of the Indebtedness to be incurred, provided that such assets are acquired substantially concurrently with the incurrence of such Indebtedness); so long as provided, however, that such Indebtedness exists at the date of such purchase, lease purchase or improvement transaction or is created within 270 365 days thereafterthereafter (for the avoidance of doubt, the purchase date for any asset shall be the later of the date of completion of installation and the beginning of the full productive use of such asset);
(5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, death, disability or other employee benefits or property, casualty or liability insurance, or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations (a) are reimbursed within 30 days following such drawing or incurrenceincurrence or (b) are permitted to be incurred (and thereupon shall deemed to be incurred) pursuant to clause (4) above following the expiry of such 30 day period;
(6) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, including earnouts, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) however, that such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor (other than the Issuer) is expressly shall be subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any the Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)Subsidiary Guarantor, such Indebtedness is expressly shall be subordinated in right of payment to the Guarantee of the Notes of such Subsidiary Guarantor; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Indebtedness being held by a person other than the Company or a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed in each case to be an issuance of such shares of Preferred StockStock not permitted by this clause (9);
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness of the Company or any Restricted Subsidiary permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal appeal, stay, surety, customs and surety replevin bonds and performance and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0100.0% of the net cash proceeds received by the Company since immediately after the Transaction Original Issue Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock, Designated Preferred Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(BSection 4.07(a)(3)(c) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make a Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) Investment and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencepreference that, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at exceed the greater of $350.0 million and 5.50% of Total Assets (as adjusted to give pro forma effect to any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease assets purchased with the proceeds of the Indebtedness to be deemed incurred or outstanding for purposes incurred, provided that such assets are acquired substantially concurrently with the incurrence of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence or issuance by the Company or any Restricted SubsidiarySubsidiary of Indebtedness or Disqualified Stock, and the issuance by any Restricted Subsidiary of IndebtednessPreferred Stock, in each case that serves to refund, refinance, replace, renew, extend or defease any Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary or Preferred Stock which serves to refund of any Restricted Subsidiary incurred or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred issued as permitted under Section 4.09(a) hereof and clauses or clause (2), (3), (4) and or (12)(a) of this Section 4.09(b), this clause (13) and or clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock previously incurred or issued to so refund refund, refinance, replace, renew, extend or refinance defease such Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock Stock, including additional Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to pay premiums (including reasonable tender premiums), defeasance costs costs, accrued interest, fees and fees expenses in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(Aa) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which that is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock being refunded refunded, refinanced, replaced, renewed, extended or refinanced,defeased (or requires no or nominal payments in cash prior to the date that is 91 days after the maturity date of the Notes);
(Bb) to the extent such Refinancing Indebtedness refinances refunds, refinances, replaces, renews, extends or defeases (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereofSubordinated Indebtedness, such Refinancing Indebtedness is subordinated or pari passu in right of payment to the Notes or the Guarantee thereof at least to the same extent as the Indebtedness being refinanced refunded, refinanced, replaced, renewed, extended or refunded defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(Dc) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the IssuerCompany;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the IssuerSubsidiary Guarantor; or
(iii) Indebtedness or Disqualified Stock of the Company or Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; and, provided, further, that subclause (a) of this clause (13) will not apply to any refunding, refinancing, replacement, renewal, extension or defeasance of any Secured Indebtedness;
(14) (x) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary incurred or issued to finance an acquisition (or other purchase of assets) or (y) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged into or amalgamated into consolidated with the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that in the case of (x) and (y) after giving effect to such acquisition, merger or amalgamation either
consolidation, either (Aa) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, or
the first sentence of this covenant or (Bb) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (Aa) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orand
Appears in 1 contract
Sources: Indenture (Chemours Co)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a1) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (2) the Issuer shall not permit any of its Restricted Subsidiary Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer and any Restricted Subsidiary may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis for of the Company Issuer and its Restricted Subsidiaries’ Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided, further, that the aggregate amount of Indebtedness (including Acquired Indebtedness) that may be Incurred and Disqualified Stock or Preferred Stock that may be issued pursuant to the foregoing by Non-Guarantor Subsidiaries shall not exceed the greater of (x) $175.0 million and (y) 9.0% of Total Assets at the time of Incurrence, at any one time outstanding.
(b) The provisions of Section 4.09(a) hereof shall foregoing limitations will not apply to:to (collectively, “Permitted Debt”):
(1i) the incurrence Incurrence by the Issuer and the Guarantors of Indebtedness under (I) the Term Loan Credit Facilities by the CompanyAgreement, the Issuer or any other Restricted Subsidiary guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount outstanding amount, not to exceed at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then time outstanding, (x) $825.0 million plus (y) additional amounts not to exceed the sum of (i) $5,250.0 million, 125.0 million plus (ii) €750.0 millionan unlimited amount that could be Incurred such that after giving effect to such Incurrence the Consolidated Senior Secured Debt Ratio would be no greater than 3.00 to 1.00 (provided that, plus the (iiiA) Indebtedness under subclauses (i) and (ii) above may be utilized in a single transaction by first calculating the incurrence under subclause (ii) (without inclusion of any amounts utilized pursuant to subclause (i)) and then calculating the incurrence under subclause (i) and (B) amounts under subclause (ii) above (to the extent permitted by the pro forma calculation of the Consolidated Senior Secured Debt Ratio) shall be deemed to have been utilized prior to utilization of amounts under subclause (i) above) and (II) the ABL Credit Agreement, the guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount, not to exceed at any one time outstanding, the greater of (x) $350.0 million and (y) the Borrowing Base as of the date of such Incurrence; in each case of any refinancing of any Indebtedness permitted under this clause (1II) or any portion thereof, less the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingIndebtedness under Receivables Financings incurred by a Receivables Subsidiary;
(2ii) the incurrence Incurrence by the Issuer and any Guarantor the Guarantors of Indebtedness represented by the Notes (not including any Additional Notes)) and the Guarantees, including any Guarantee of the Notesas applicable;
(3iii) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2) of this Section 4.09(bii));
(4iv) Indebtedness (including including, without limitation, Capitalized Lease Obligations), Disqualified Stock Obligations and Preferred Stock incurred mortgage financings as purchase money obligations) Incurred by the Company Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer to finance all or any part of the purchase, lease lease, construction, installation, repair or improvement of property (real or personal) ), plant or equipment that is or other fixed or capital assets used or useful in the business of the Issuer or its Restricted Subsidiaries or in a Similar Business, Business (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) in an aggregate principal amountamount or liquidation preference, together with any Refinancing including all Indebtedness in respect thereof Incurred and all other Indebtedness, Disqualified Stock and/or or Preferred Stock issued to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred and outstanding under Disqualified Stock or Preferred Stock issued pursuant to this clause (4iv), not to exceed 4.0the greater of (x) $125.0 million and (y) 6.0% of Total Assets at the time of Incurrence, at any one time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5v) Indebtedness incurred Incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtednesscredit, such obligations are reimbursed within 30 days following such drawing or incurrencedrawing;
(6vi) Indebtedness the Incurrence of Indebtedness, Disqualified Stock or Preferred Stock arising from or related to agreements of the Company Issuer or its Restricted Subsidiaries providing for related to indemnification, earn-outs, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the acquisition or disposition of any business, assets or a SubsidiarySubsidiary of the Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred or Disqualified Stock or Preferred Stock issued by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness or Disqualified Stock of the Company Issuer owing to a Restricted Subsidiary; provided that (x) any such Indebtedness or Disqualified Stock owing to a Restricted Non-Guarantor Subsidiary that is not a Guarantor (other than the Issuer) is expressly shall be unsecured and subordinated in right of payment to the Notes; provided further that Issuer’s Obligations with respect to the Notes and (y) any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness or Disqualified Stock (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence Incurrence of such IndebtednessIndebtedness or an issuance of such Disqualified Stock not permitted by this clause (vii);
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness Stock not permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b)viii);
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company (i) MPM shall not, and shall not permit any of its the Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) MPM shall not permit any of the Restricted Subsidiary Subsidiaries (other than a Note Guarantor) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company MPM and any Restricted Subsidiary may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of MPM for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1) the incurrence Incurrence by MPM or the Restricted Subsidiaries of Indebtedness (including under any Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $1,500.0 million plus an aggregate additional principal amount of Consolidated Total Indebtedness constituting First Priority Lien Obligations outstanding at any one timetime that does not cause the Consolidated Secured Debt Ratio of MPM to exceed 3.75 to 1.00, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee of the Notes;
(3) Indebtedness of the Company, the Issuer and their Subsidiaries in existence determined on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) Indebtedness a pro forma basis (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Company or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion pro forma application of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuertherefrom);
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Sources: Indenture (Momentive Performance Materials Quartz, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Holdings III shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company Holdings III will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, that the Company Holdings III may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company Holdings III and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the CompanyHoldings III, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one timeamount, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Senior Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of million outstanding at any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingone time;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Initial Notes (not including any Guarantee) and the Exchange Notes and related Guarantees to be issued in exchange for Notes and the Guarantees pursuant to the Registration Rights Agreement (other than any Additional Notes), including any Guarantee of the Notes;
(3) Indebtedness of the Company, the Issuer Holdings III and their its Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Company Holdings III or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), ) not to exceed 4.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred by the Company Holdings III or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company Holdings III or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company Holdings III or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a6)(a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company Holdings III and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company Holdings III to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Holdings III or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company Holdings III or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company Holdings III or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Holdings III or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Holdings III or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company Holdings III or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company Holdings III and Indebtedness, Disqualified Stock or Preferred Stock of the Company Holdings III or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company Holdings III since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies Holdings III or cash contributed to the capital of the Company Holdings III (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company Holdings III or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company Holdings III and Indebtedness, Disqualified Stock or Preferred Stock of the Company Holdings III or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b12)(b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company Holdings III or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a4.09(a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company Holdings III or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(DC) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Holdings III that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company Holdings III or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Holdings III that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company Holdings III or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company Holdings III or, subject to Section 4.09 (c4.09(c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Holdings III or any Restricted Subsidiary or merged or amalgamated into the Company Holdings III or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation amalgamation, either
(A) the Company Holdings III would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company Holdings III and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger amalgamation or amalgamationmerger;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company Holdings III or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company Holdings III or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Sources: Indenture (Freescale Semiconductor Holdings I, Ltd.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (ai) The Company Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock and will Stock; and
(ii) Holdings shall not permit any of its Restricted Subsidiary Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and Holdings and any Restricted Subsidiary that is a Guarantor may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and the Company and Holdings and any Restricted Subsidiary that is a Guarantor may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of Holdings for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-four quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by Holdings or its Restricted Subsidiaries of Indebtedness under the Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ ' acceptances thereunder (with letters of credit and bankers’ ' acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $1,950 million outstanding at any one time, when taken together less the amount of any such Indebtedness permanently retired with the aggregate principal amount (or, if issued with original issue discount, Net Proceeds from any Asset Sale applied from and after the accreted value) of Existing Secured Notes, Issue Date to reduce the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus outstanding amounts pursuant to Section 4.06;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer Company and any Guarantor the Guarantors of Indebtedness represented by (A) the Original Securities and the Senior Subordinated Guarantees, as applicable, (B) the Exchange Securities issued in exchange for the Original Securities and the Senior Subordinated Guarantees thereof, and (C) the Senior Notes (not including any Additional Notes)and the related guarantees, including any Guarantee of the Notesas applicable;
(3iii) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b));
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company Holdings or any of its Restricted Subsidiaries, Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and Indebtedness then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed 4.03% of Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company Holdings or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including including, without limitation, letters of credit in respect of workers’ ' compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ ' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtednesscredit, such obligations are reimbursed within 30 days following such drawing or incurrencedrawing;
(6vi) Indebtedness arising from agreements of the Company Holdings or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the disposition of any business, assets or a SubsidiarySubsidiary of Holdings in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company Holdings to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notesobligations of Holdings under its Senior Subordinated Guarantee; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Holdings or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to Holdings or another Restricted Subsidiary; provided that (1) any such Indebtedness is made pursuant to an intercompany note and (2) if a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Senior Subordinated Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary lending such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are Incurred in the ordinary course of business (excluding Hedging Obligations entered into and not for speculative purposes): (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases;
(11xi) obligations in respect of performance, bid, appeal bid and surety bonds and completion guarantees provided by the Company Holdings or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company Holdings or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary Holdings not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencewhich, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed $175 million at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Indebtedness Incurred under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which Holdings, or the Company or such Restricted Subsidiary Subsidiary, as the case may be, could have incurred Incurred such Indebtedness, Disqualified Stock or Preferred Stock Indebtedness under Section 4.09 (a4.03(a) hereof without reliance on upon this clause (12)(bxii));
(13xiii) the incurrence any guarantee by the Company or a Guarantor of Indebtedness or other obligations of Holdings or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by Holdings or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Securities or the Senior Subordinated Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of Indebtednesssuch Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantor's Senior Subordinated Guarantee with respect to the Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Senior Subordinated Guarantee of such Restricted Subsidiary, Disqualified Stock as applicable;
(xiv) the Incurrence by Holdings or Preferred Stock any of its Restricted Subsidiaries of Indebtedness which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred Indebtedness Incurred as permitted under Section 4.09(a4.03(a) hereof and clauses (2ii), (3iii), (4iv), (xv) and (12)(axx) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock Indebtedness issued to so refund or refinance such IndebtednessIndebtedness (subject to the following proviso, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “"Refinancing Indebtedness”") prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock Indebtedness being refunded or refinanced,;
(B2) has a Stated Maturity which is no earlier than the Stated Maturity of the Indebtedness being refunded or refinanced;
(3) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to with, or junior to, the Notes Securities or any the Senior Subordinated Guarantee thereofof such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is subordinated or pari passu to with, or junior to, the Notes Securities or the Senior Subordinated Guarantee at least of such Restricted Subsidiary, as applicable;
(4) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the same extent as aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium and fees Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of Holdings that is not the Company or refunded a Guarantor that refinances Indebtedness of the Company or a Guarantor, or (iiy) Disqualified Stock Indebtedness of Holdings or Preferred Stock, such Refinancing a Restricted Subsidiary that refinances Indebtedness must be Disqualified Stock or Preferred Stock, respectively,of an Unrestricted Subsidiary; and
(C6) in the case of any Refinancing Indebtedness in respect Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of Indebtedness under the Senior Credit Facilitiesthis Section 4.03(b), the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required deemed to have been Incurred and to be incurred substantially contemporaneously with the related refinancing outstanding under such clause (iv) or (xx) of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoingthis Section 4.03(b), as applicable, within 45 days following the incurrence and not this clause (xiv) for purposes of determining amounts outstanding under such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect clauses (iv) and (xx) of the Senior Credit Facilitiesthis Section 4.03(b); provided, such Notesfurther, NXP Notes or Existing Secured Note, or Refinancing Indebtedness that subclauses (1) and (2) of any of the foregoing, as applicable, and
this clause (Dxiv) shall not include:
(i) apply to any refunding or refinancing of any Senior Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(iixv) Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Holdings or any of its Restricted Subsidiary Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided provided, however, that such Indebtedness or Disqualified Stock is not Incurred in contemplation of such acquisition or merger or to provide all or a portion of the funds or credit support required to consummate such acquisition or merger; provided, further, however, that after giving effect to such acquisition, merger or amalgamation acquisition and the Incurrence of such Indebtedness either:
(A1) the Company Holdings would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or would be greater than immediately prior to such acquisition, merger or amalgamation;
(15xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to Holdings or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five two Business Days of its incurrenceIncurrence;
(16xviii) Indebtedness of the Company Holdings or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit issued pursuant to the Credit FacilitiesAgreement, in a principal amount not in excess of the stated amount of such letter of credit;
(17xix) Contribution Indebtedness;
(xx) (A) any guarantee by if Holdings could Incur $1.00 of additional Indebtedness pursuant to Section 4.03(a) after giving effect to such borrowing, Indebtedness of Foreign Subsidiaries not otherwise permitted hereunder or (B) if Holdings could not Incur $1.00 of additional Indebtedness pursuant to Section 4.03(a) after giving effect to such borrowing, Indebtedness of Foreign Subsidiaries of the Company or a Restricted Subsidiary Incurred for working capital purposes, provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (xx), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), does not exceed the greater of (x) $125 million and (y) 10% of the consolidated assets of the Foreign Subsidiaries; and
(xxi) Indebtedness of Holdings or other obligations of any Restricted Subsidiary so long consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business.
(c) Notwithstanding the foregoing, neither the Company nor any Guarantor may Incur any Indebtedness pursuant to Section 4.03(b) if the proceeds thereof are used, directly or indirectly, to repay, prepay, redeem, defease, retire, refund or refinance any Subordinated Indebtedness unless such Indebtedness shall be subordinated to the Securities or such Guarantor's Senior Subordinated Guarantee, as applicable, to at least the same extent as such Subordinated Indebtedness. For purposes of determining compliance with this Section 4.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xxi) above or is entitled to be Incurred pursuant to Section 4.03(a), Holdings shall, in its sole discretion, classify or reclassify such item of Indebtedness in any manner that complies with this Section 4.03 and such item of Indebtedness shall be treated as having been Incurred pursuant to only one of such clauses or pursuant to Section 4.03(a); provided that all Indebtedness under the Credit Agreement outstanding on the Issue Date shall be deemed to have been Incurred pursuant to clause (i) and Holdings shall not be permitted to reclassify all or any portion of such Indebtedness. Accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.03. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which are otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of case may be, was in compliance with this Indenture, orSection 4.03.
Appears in 1 contract
Sources: Indenture (Nalco Energy Services Equatorial Guinea LLC)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall Borrower will not, and shall will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) ), with respect to any Indebtedness (including Acquired Indebtedness) ), and the Company Borrower will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, provided that so long as no Event of Default has occurred and is continuing the Company Borrower may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and or issue shares of Preferred Stock, if the Fixed Charge Borrower’s Interest Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ Borrower’s most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued Test Period would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of the proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee of the Notes;
(3) Indebtedness of the Company, the Issuer and their Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Company or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claimsTest Period; provided, further, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6x) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 complies with the Required Additional Debt Terms and (ay) hereof without reliance on this clause (12)(b));
(13) the any incurrence by the Company of Indebtedness or any Restricted Subsidiary, issuance of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance by any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company that is not a Subsidiary Guarantor pursuant to this clause (other than the Issuera) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, shall be subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test limitations set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or6.01(g).
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (ai) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Company shall not permit any of its Restricted Subsidiary Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company any Issuer and any Restricted Subsidiary may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of the Company for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4A.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount outstanding at any one timetime equal to the greater of (x) $770.0 million and (y) an amount such that, when taken together with after giving effect to the aggregate principal amount Incurrence of such Indebtedness (or, if issued with original issue discountand the application of the net proceeds therefrom), the accreted value) of Existing Consolidated Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus Debt Ratio would be no greater than 3.25 to 1.00;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer Company and any Guarantor the Guarantors of Indebtedness represented by the Notes Original Securities (not including any Additional Notes)Securities) and the Note Guaranties, as applicable (including any Guarantee of the Notes;
(3Exchange Securities and the related guarantees thereof) Indebtedness of and the Company, Existing Second Lien Notes and the Issuer and their Subsidiaries in existence Senior Subordinated Notes outstanding on the Issue Date or and, in each case, the Merger related guarantees thereof;
(iii) Indebtedness existing on the Issue Date (after giving effect to the offering of the Old Second Lien Notes) (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b)4A.03(b) and other than the Existing Senior Secured Notes);
(4iv) (a) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company to finance (whether prior to or within 270 days after) the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued and then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed 4.0the greater of $75.0 million and 5.0% of Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the Acquisition or any other acquisition or disposition of any business, assets or a SubsidiarySubsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing owed to a Restricted Subsidiary that is not neither Finance Co. nor a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notesobligations of the Company under the Securities; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence Incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is not Finance Co. or a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guaranty of such Guarantor, as applicable; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into that are not Incurred for speculative purposespurposes and either: (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or (3) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases or sales;
(11xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amount or liquidation preferenceamount, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed $100.0 million at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Indebtedness Incurred under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4A.03(a) hereof from and after the first date on which the Company, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4A.03(a) without reliance upon this clause (xii));
(xiii) any guarantee (or co-issuance in the case of Finance Co.) by an Issuer or a Guarantor of Indebtedness or other obligations of the Company or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by such Issuer or such Restricted Subsidiary could have incurred is permitted under the terms of this Indenture; provided that if such IndebtednessIndebtedness is by its express terms subordinated in right of payment to the Securities or the Note Guaranty of such Restricted Subsidiary, as applicable, any such guarantee (or co-issuance in the case of Finance Co.) of such Issuer or such Guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Securities or such Guarantor’s Note Guaranty with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Guaranty of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by of a Restricted Subsidiary of the Company which serves to refund, refinance or defease any Restricted Subsidiary, of Indebtedness, Indebtedness Incurred or Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred issued as permitted under Section 4.09(a4A.03(a) hereof and or clauses (2ii), (3iii), (4iv), (xiv), (xv), (xix) and and/or (12)(axx) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4A.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock Stock, including additional any Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,refinanced and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date one year following the last maturity date of any Securities then outstanding were instead due on such date one year following the last date of maturity of the Securities;
(B2) has a Stated Maturity which is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (ia) Indebtedness subordinated or pari passu junior to the Notes Securities or any Guarantee thereofthe Note Guaranty of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes Securities or the Guarantee at least to the same extent Note Guaranty of such Restricted Subsidiary, as the Indebtedness being refinanced or refunded applicable, or (iib) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,;
(C4) is Incurred in an aggregate amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilitiesaggregate amount (or if issued with original issue discount, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any aggregate accreted value) then outstanding of the foregoingIndebtedness being refinanced plus premium, fees and expenses Incurred in connection with such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, andrefinancing;
(D5) shall not include:
include (ix) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of a Restricted Subsidiary of the Company that is not neither Finance Co. nor a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock Indebtedness of an Issuer or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company that is not a Guarantor Guarantor, or (other than the Issuery) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of an Unrestricted Subsidiary;; and
(146) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4A.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4A.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4A.03(b); provided, further, that subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities, the Existing Second Lien Notes or any Secured Indebtedness constituting First Priority Lien Obligations.
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant Incurred to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, finance an acquisition or
Appears in 1 contract
Sources: Indenture (Verso Paper Holdings LLC)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, provided that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to clause (c) of this Section 4.09(c) hereof4.09, any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for Holdings, the Company and its Restricted SubsidiariesSubsidiaries for Holdings’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 2.0 to 1.00 (the “Fixed Charge Coverage Test”)1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof shall will not apply to:
(1) the incurrence by the Company or any Restricted Subsidiary that is a Guarantor of Indebtedness under pursuant to Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing4,265,000,000;
(2) the incurrence by the Issuer Company and any Subsidiary Guarantor of Indebtedness represented by the Notes issued on the Issue Date and any replacement Notes therefor (not including any Additional Notes), including any Guarantee of the Notesthereof);
(3) Indebtedness of the Company, the Issuer Company and their its Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4i) Indebtedness (including Capitalized Lease Obligations), ) and Disqualified Stock and Preferred Stock incurred or issued by the Company or any of its Restricted SubsidiariesSubsidiary and Preferred Stock issued by any Restricted Subsidiary, to finance the purchase, lease or improvement of property (real or personal) ), equipment or equipment other assets that is in each case are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and (ii) Indebtedness arising under Capitalized Leases other than those in effect on the Issue Date or entered into pursuant to subclause (i) of this clause (4), in an aggregate principal amount, together with any Refinancing refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or or Preferred Stock incurred or issued and outstanding under this clause (4), not to exceed 4.0the greater of (a) $150,000,000 and (b) 3.0% of Total Assets (in each case, determined at the date of incurrence) at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bank guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or created in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; provided, provided that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts earn-outs or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)Subsidiary Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Subsidiary Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted Subsidiaries) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred StockStock not permitted by this clause (9);
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to under this Section 4.09Indenture, exchange rate risk or commodity pricing risk;
(11) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Company or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal that is a Guarantor in an aggregate principal amount or liquidation preference up to 200.0200% of the net cash proceeds received by the Company since immediately after the Transaction Date May 9, 2012 from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B3)(C) and (3)(C3)(D) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses or, in the case of proceeds received prior to the Issue Date, clause (3)(A) of Section 4.07(a) hereof to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof (or the equivalent provision of the 2019 Notes Indenture) or to make Permitted Investments under the Indenture or the 2019 Notes Indenture (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and thereof in the Indenture or the 2019 Notes Indenture); and
(b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencepreference which, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed the greater of (i) $900.0 million 350,000,000 and (ii) 5.0% of Total Assets; provided that no more than the greater of (x) $300,000,000 and (y) 4.5% of Total Assets may be incurred by any Restricted Subsidiary that is not a Guarantor pursuant to this clause (12)(b) (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b12)(b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof the first paragraph of this covenant from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof the first paragraph of this covenant without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, Subsidiary of Indebtedness, the issuance by the Company or any Restricted Subsidiary of Disqualified Stock or the issuance by any Restricted Subsidiary of Preferred Stock which serves to extend, replace, refund, refinance, renew or defease any Indebtedness incurred or Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred issued as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause clauses (14) and (24) of this Section 4.09(b) or any Indebtedness, Indebtedness incurred or Disqualified Stock or Preferred Stock issued to so refund extend, replace, refund, refinance, renew or refinance defease such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, provided that such Refinancing Indebtedness:
(Aa) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded extended, replaced, refunded, refinanced, renewed or refinanced,defeased;
(Bb) if such Indebtedness is Subordinated Indebtedness or Disqualified Stock, has a final scheduled maturity date equal to or later than the final scheduled maturity date of such Subordinated Indebtedness or Disqualified Stock being so defeased, redeemed, repurchased, exchanged, acquired or retired;
(c) to the extent such Refinancing Indebtedness refinances extends, replaces, refunds, refinances, renews or defeases (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee thereof at least to the same extent as the Indebtedness being refinanced extended, replaced, refunded, refinanced, renewed or refunded defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,;
(Cd) in if the case of Indebtedness extended, replaced, refunded, refinanced, renewed or defeased is secured by any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit FacilitiesLiens, the NotesLiens securing such Indebtedness have the same priority as, and are limited to the same property and assets (including additional future assets and proceeds) subject to, the NXP Notes Liens securing such Indebtedness being so extended, replaced, refunded, refinanced, renewed or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicabledefeased; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(De) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of the Company or the IssuerCompany;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the IssuerSubsidiary Guarantor; or
(iii) Indebtedness or Disqualified Stock of the Company or Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) (a) Indebtedness or Disqualified Stock of the Company or, subject to the third paragraph of this covenant, Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred or issued to finance an acquisition or (yb) Indebtedness, Disqualified Stock or Preferred Stock of Persons that are acquired by the Company or any Restricted Subsidiary or merged into or amalgamated into consolidated with the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that in the case of clauses (a) and (b), after giving effect to such acquisition, merger merger, amalgamation or amalgamation either
consolidation, either (Ax) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
or (By) the Fixed Charge Coverage Ratio of for the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger merger, amalgamation or amalgamationconsolidation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit FacilitiesFacilities that is incurred under clause (1) of this Section 4.09(b), in a principal amount not in excess of the stated amount of such letter of credit;
(17) (Aa) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this IndentureIndenture or (b) any guarantee by a Restricted Subsidiary of Indebtedness of the Company; provided that such guarantee is incurred in accordance with Section 4.17 hereof;
(18) Indebtedness consisting of Indebtedness issued by the Company or any of its Restricted Subsidiaries to future, present or former employees, directors, officers, managers and consultants thereof, their respective Controlled Investment Affiliates or Immediate Family Members, in each case to finance the purchase or redemption of Equity Interests of the Company or any direct or indirect parent company of the Company to the extent described in clause (4) of Section 4.07(b) hereof;
(19) customer deposits and advance payments received in the ordinary course of business from customers for goods purchased in the ordinary course of business;
(20) Indebtedness in respect of Bank Products provided by banks or other financial institutions to the Company and its Restricted Subsidiaries in the ordinary course of business;
(21) Indebtedness incurred by a Restricted Subsidiary in connection with bankers’ acceptances, discounted bills of exchange or the discounting or factoring of receivables for credit management purposes, in each case incurred or undertaken in the ordinary course of business on arm’s length commercial terms on a recourse basis;
(22) Indebtedness of the Company or any of its Restricted Subsidiaries consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements in each case, incurred in the ordinary course of business;
(23) the incurrence of Indebtedness by Foreign Subsidiaries o
Appears in 1 contract
Sources: Indenture (Sabre Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company On and following the Effective Date, the Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) ), with respect to any Indebtedness (including Acquired Indebtedness) ), and the Company Issuer will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, provided that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company Issuer and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided further that the amount of Indebtedness (including Acquired Indebtedness) for borrowed money, Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors shall not (together with (x) any Refinancing Indebtedness in respect thereof incurred or issued by Restricted Subsidiaries that are not Guarantors and outstanding pursuant to clause Section 4.09(b)(13) and (y) the amount of Indebtedness for borrowed money, Disqualified Stock and Preferred Stock, incurred or issued by Restricted Subsidiaries that are not Guarantors pursuant to Section 4.09(b)(12)(b) and any Refinancing Indebtedness in respect thereof incurred or issued by Restricted Subsidiaries that are not Guarantors and outstanding pursuant to clause Section 4.09(b)(13)) exceed the greater of $700.0 million and 25% of EBITDA outstanding as of the time of any incurrence pursuant to this Section 4.09(a).
(b) The provisions of Section 4.09(a) hereof shall not apply to:
(1) the incurrence of (A) Indebtedness under Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Guarantor and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof); provided that, and immediately after giving effect to any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtednessincurrence or issuance, up to an the then-outstanding aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if of all Indebtedness incurred or issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) (including, for avoidance of doubt, clause (B) of this clause (1)) does not exceed the sum of (a) the greater of $2,100.0 million and 75% of EBITDA, plus (b) $6,000.0 million, plus (c) the maximum amount of Indebtedness such that, after giving pro forma effect to such incurrence (in a manner consistent with the calculation of the Fixed Charge Coverage Ratio), the Consolidated Secured Debt Ratio of the Issuer does not exceed 3.25 to 1.00 (provided that, for purposes of determining the amount of Indebtedness that may be incurred pursuant to this subclause (c), all Indebtedness incurred pursuant to this clause (1) (including, for avoidance of doubt, clause (B) of this clause (1)) shall be deemed to be secured by a Lien on property of the Issuer and its Restricted Subsidiaries) and (B) Indebtedness under Credit Facilities by the Issuer or any portion thereofGuarantor that serves to extend, the aggregate amount replace, refund, refinance, renew, or defease any Indebtedness originally incurred pursuant to clause (A) of this clause (1), including additional Indebtedness incurred or issued to pay premiums (including tender premiums), defeasance costs, and accrued interest, fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such extension, replacement, refunding, refinancing, renewal or defeasance;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Guarantee) (other than any Additional Notes), ) and the Secured Notes (including any Guarantee of guarantee thereof) (other than any “Additional Notes” as defined in the Notesapplicable Secured Notes Indenture);
(3) Indebtedness of the Company, the Issuer and their its Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), ) incurred or Disqualified Stock and Preferred Stock incurred issued by the Company Issuer or any of its Restricted SubsidiariesSubsidiaries and Preferred Stock issued by any Restricted Subsidiary, to finance the purchaseacquisition, lease construction, repair, replacement, or improvement of property (real or personal) ), equipment, or equipment other fixed or capital assets that is are used or useful in a Similar Business; provided that such Indebtedness exists at the date of the applicable acquisition, whether through construction, repair, replacement, or improvement or is created within 365 days thereafter; provided, further that the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amountamount or liquidation preference of all such Indebtedness, Disqualified Stock or Preferred Stock, as applicable, incurred or issued pursuant to this clause (4), when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock, and Preferred Stock then outstanding and incurred pursuant to this clause (4), together with any Refinancing Indebtedness in respect thereof then outstanding and all other Indebtednessincurred pursuant to clause (13) below, Disqualified Stock and/or Preferred Stock issued and outstanding under does not as of the time of any incurrence pursuant to this clause (4), not to ) exceed 4.0the greater of $500.0 million and 18% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;EBITDA.
(5) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including letters of credit in respect of workers’ workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ workers compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company Issuer or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts earn-outs or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets assets, or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosed thereon)) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that that, if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosed thereon)) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another Restricted Subsidiary or any pledge of its Restricted Subsidiariessuch Preferred Stock constituting a Permitted Lien (but not foreclosed thereon)) shall be deemed in each case to be an issuance of such shares of Preferred StockStock not permitted by this clause (9);
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal appeal, and surety bonds and performance and completion guarantees and similar obligations provided by the Company Issuer or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees, or similar instruments related thereto, in each case, in the ordinary course of businessbusiness or consistent with past practice or industry practices;
(12) (a) Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock Stock, or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0100.0% of the net cash proceeds received by the Company since immediately Issuer after the Transaction Issue Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies Issuer or cash contributed to the capital of the Company Issuer (in each case, other than proceeds of Excluded Contributions or Disqualified Stock or sales of Equity Interests to the Company Issuer or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent hereof; provided, however, that (i) any such net cash proceeds received or cash have contributed shall not been applied pursuant to such clauses to make increase the amount available for making Restricted Payments to the extent any Indebtedness, Disqualified Stock or to make other Investments, payments Preferred Stock is issued or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments incurred in reliance on this clause (other than Permitted Investments specified in clauses (112)(a) and (3ii) any such net cash proceeds received or cash contributed that are applied to make any Restricted Payments shall be excluded for purposes of the definition thereof) incurring or issuing Indebtedness, Disqualified Stock or Preferred Stock pursuant to this clause (12)(a); and (b) Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock Stock, and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), together with any Refinancing Indebtedness in respect thereof then outstanding and incurred pursuant to clause (13) below, does not at any one time outstanding exceed the greater of $900.0 1,400.0 million and 50% of EBITDA; provided, that the amount of Indebtedness (it being understood that any including Acquired Indebtedness) for borrowed money, Disqualified Stock or Stock, and Preferred Stock that may be incurred or issued, as applicable, pursuant to this clause (1212)(b) by Restricted Subsidiaries that are not Guarantors shall not (btogether with (x) shall cease to be deemed any Refinancing Indebtedness in respect thereof incurred or issued by Restricted Subsidiaries that are not Guarantors and outstanding pursuant to clause (13) below and (y) the amount of Indebtedness for purposes borrowed money, Disqualified Stock and Preferred Stock, incurred or issued by Restricted Subsidiaries that are not Guarantors pursuant to Section 4.09(a) and any Refinancing Indebtedness in respect thereof incurred or issued by Restricted Subsidiaries that are not Guarantors and outstanding pursuant to clause (13) below) exceed the greater of $700.0 million and 25% of EBITDA outstanding at the time of any incurrence pursuant to this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company Issuer or any Restricted Subsidiary, Subsidiary of Indebtedness, Indebtedness or the issuance of Disqualified Stock or the issuance by any Restricted Subsidiary of Preferred Stock which serves to refund extend, replace, refund, refinance, renew, or refinance defease any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) ), and (12)(a12) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund extend, replace, refund, refinance, renew, or refinance defease such Indebtedness, Disqualified Stock Stock, or Preferred Stock including additional Indebtedness, Disqualified Stock Stock, or Preferred Stock incurred or issued to pay premiums (including reasonable tender premiums), defeasance costs and fees accrued interest, fees, and expenses in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, provided that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which that is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded extended, replaced, refunded, refinanced, renewed, or refinanceddefeased,
(B) to the extent such Refinancing Indebtedness refinances extends, replaces, refunds, refinances, renews or defeases (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee thereof at least to the same extent as the Indebtedness being refinanced extended, replaced, refunded, refinanced, renewed, or refunded defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(DC) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the IssuerGuarantor; or
(iii) Indebtedness or Disqualified Stock of the Issuer or Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock Stock, or Preferred Stock of an Unrestricted Subsidiary; and provided further that subclause (A) of this clause (13) shall not apply to any extension, replacement, refunding, refinancing, renewal, or defeasance of Indebtedness that matures prior to the Notes;
(14) (x) Indebtedness or Disqualified Stock of the Issuer or Indebtedness, Disqualified Stock Stock, or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred or issued to finance an acquisition (or other purchase of assets), merger, or consolidation or (y) Indebtedness, Disqualified Stock, or Preferred Stock of Persons that are acquired by the Company Issuer or any Restricted Subsidiary or merged into or amalgamated consolidated with or into the Company Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that that, after giving effect to such acquisition, merger merger, or amalgamation consolidation, if more than $200.0 million of Indebtedness, Disqualified Stock, or Preferred Stock, together with any Refinancing Indebtedness in respect thereof incurred and outstanding pursuant to clause (13) above, is at any time outstanding under this clause (14), either
(A) the Company Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orCoverage
Appears in 1 contract
Sources: Indenture (Organon & Co.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company (i) Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) Holdings shall not permit any of its Restricted Subsidiary Subsidiaries (other than a Guarantor) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Holdings and any Restricted Subsidiary may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of Holdings for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by Holdings or its Restricted Subsidiaries of Indebtedness under any Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $2.675 billion plus an aggregate additional principal amount of Consolidated Total Indebtedness constituting First Priority Lien Obligations outstanding at any one time, when taken together with time that does not cause the aggregate principal amount Consolidated Secured Debt Ratio of Holdings to exceed 3.75 to 1.00 determined on a pro forma basis (or, if issued with original issue discount, including a pro forma application of the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus net proceeds therefrom);
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer Issuers and any Guarantor the Guarantors of Indebtedness represented by the Notes or the Exchange Notes (not including any Additional Notes)) and the related Guarantees, including any Guarantee of the Notesas applicable;
(3iii) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or (after giving effect to the Merger Date Offering Transactions) (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b)), including the Existing Debentures, the Existing Second Lien Notes, the Existing Senior Secured Notes and the guarantees thereof;
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company Holdings or any of its Restricted Subsidiaries, Subsidiaries to finance (whether prior to or within 270 days after) the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and Indebtedness then outstanding under that was Incurred (or deemed Incurred pursuant to clause (xiv) below) pursuant to this clause (4iv), does not to exceed 4.0the greater of $150.0 million and 5.0% of Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company Holdings or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtednesscredit, such obligations are reimbursed within 30 days following such drawing or incurrencedrawing;
(6vi) Indebtedness arising from agreements of the Company Holdings or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the disposition of any business, assets or a SubsidiarySubsidiary of Holdings in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that
(A) , at the time of closing, the amount of such Indebtedness is not reflected on determinable and, to the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all extent such Indebtedness shall at no time exceed thereafter becomes fixed and determined, the gross 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 by the Company and its Restricted Subsidiaries in connection with such dispositionIndebtedness is paid within 60 days thereafter;
(7vii) Indebtedness of the Company Holdings to a Restricted Subsidiary; provided provided, however, that any such Indebtedness owing owed to a Restricted Subsidiary that is not an Issuer or a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notesobligations of Holdings under its Guarantee; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)however, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided, however, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Holdings or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to Holdings or another Restricted Subsidiary; provided, however, that if a Guarantor Subsidiary Incurs such Indebtedness to a Restricted Subsidiary that is not an Issuer or a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided, further, however, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into that are not Incurred for speculative purposes: (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases;
(11xi) obligations in respect of performance, bid, appeal bid and surety bonds, including surety bonds issued in respect of workers’ compensation claims, and completion guarantees provided by the Company Holdings or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock Holdings or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which as applicable, which, when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed the greater of $150.0 million and 5.0% of Total Assets at any one the time outstanding exceed $900.0 million of Incurrence (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Indebtedness Incurred under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which Holdings, or the Company or such Restricted Subsidiary Subsidiary, as the case may be, could have incurred Incurred such Indebtedness, Disqualified Stock or Preferred Stock Indebtedness under Section 4.09 (a4.03(a) hereof without reliance on upon this clause (12)(bxii));
(13xiii) the incurrence any guarantee by the Company Holdings or any of its Restricted Subsidiaries of Indebtedness or other obligations of Holdings or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by Holdings or such Restricted Subsidiary is permitted under the terms of this Indenture; provided, however, that if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of Indebtednessany Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantor’s Guarantee with respect to the Notes substantially to the same extent as such Indebtedness is subordinated to the Notes or the Guarantee of such Guarantor, Disqualified Stock as applicable;
(xiv) the Incurrence by Holdings or Preferred Stock any of its Restricted Subsidiaries of Indebtedness which serves to refund refund, refinance or refinance defease any Indebtedness, Disqualified Stock or Preferred Stock incurred Indebtedness Incurred as permitted under Section 4.09(a4.03(a) hereof and clauses (2ii), (3iii), (4iv), (xiv), (xv) and and/or (12)(axix) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Indebtedness Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtednessincluding, Disqualified Stock or Preferred Stock incurred in each case, any Indebtedness Incurred to pay premiums (including reasonable tender premiums), expenses, defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity); provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity ofof the Indebtedness being refunded, refinanced or defeased and (y) the Indebtedness, Disqualified Stock or Preferred Stock Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness being refunded or refinanced,refinanced that were due on or after the date one year following the last maturity date of any Notes then outstanding were instead due on such date one year following;
(B2) has a Stated Maturity which is no earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or (y) one year following the last maturity date of any Notes then outstanding;
(3) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes or the Guarantee at least of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the same extent Notes or the Guarantee of such Restricted Subsidiary, as applicable;
(4) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium, expenses, costs and fees Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of Holdings that is not a Guarantor that refinances Indebtedness of Holdings or refunded another Guarantor (unless such Restricted Subsidiary is an obligor with respect to such Indebtedness being refinanced), or (iiy) Disqualified Stock Indebtedness of Holdings or Preferred Stock, such Refinancing a Restricted Subsidiary that refinances Indebtedness must be Disqualified Stock or Preferred Stock, respectively,of an Unrestricted Subsidiary; and
(C6) in the case of any Refinancing Indebtedness in respect Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of Indebtedness under the Senior Credit Facilitiesthis Section 4.03(b), the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required deemed to have been Incurred and to be incurred substantially contemporaneously with the related refinancing outstanding under such clause (iv) or (xx) of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoingthis Section 4.03(b), as applicable, within 45 days following the incurrence and not this clause (xiv) for purposes of determining amounts outstanding under such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect clauses (iv) and (xx) of the Senior Credit Facilitiesthis Section 4.03(b); provided, such Notesfurther, NXP Notes or Existing Secured Notehowever, or Refinancing Indebtedness that subclauses (1), (2) and (3) of any of the foregoing, as applicable, and
this clause (Dxiv) shall not include:
apply to any refunding or refinancing of (iA) Indebtednessthe Notes, Disqualified Stock (B) any Secured Indebtedness constituting a First-Priority Lien Obligation or Preferred Stock (C) any Existing Debentures consisting of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuerpollution control bonds;
(iixv) Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Holdings or any of its Restricted Subsidiary incurred Subsidiaries Incurred to finance an acquisition or (y) Persons that are acquired by the Company Holdings or any of its Restricted Subsidiary Subsidiaries or merged with or amalgamated into the Company Holdings or a Restricted Subsidiary in accordance with the terms of this Indenture; provided provided, however, that after giving effect to such acquisition, merger or amalgamation acquisition and the Incurrence of such Indebtedness either:
(A1) the Company Holdings would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or would be greater than immediately prior to such acquisition, merger or amalgamation;
(15xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to Holdings or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, provided however, that such Indebtedness is extinguished within five Business Days of its incurrenceIncurrence;
(16xviii) Indebtedness of the Company Holdings or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit FacilitiesAgreement, in a principal amount not in excess of the stated amount of such letter of credit;
(17xix) Contribution Indebtedness;
(Axx) Indebtedness of Foreign Subsidiaries of Holdings for working capital purposes or any guarantee other purposes, provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (xx) other than for working capital purposes, when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), does not exceed the greater of $150 million and 5.0% of Total Assets at the time of Incurrence;
(xxi) Indebtedness of Holdings or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, entered into in the ordinary course of business;
(xxii) Indebtedness Incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of Holdings or any Restricted Subsidiary not in excess, at any one time outstanding, of $7.5 million; and
(xxiii) Indebtedness issued by the Company Holdings or a Restricted Subsidiary to current or former officers, directors and employees thereof or any direct or indirect parent thereof, or their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of Holdings or any of its direct or indirect parent companies to the extent permitted under clause (iv) of the covenant described under Section 4.04(b).
(c) For purposes of determining compliance with this Section 4.03, (A) Indebtedness need not be Incurred solely by reference to one category of permitted Indebtedness described in clauses (i) through (xxiii) or pursuant to Section 4.03(a) but is permitted to be Incurred in part under any combination thereof and (B) in the event that an item of Indebtedness (or other obligations any portion thereof) meets the criteria of one or more of the categories of permitted Indebtedness described in clauses (i) through (xxiii) above or is entitled to be Incurred pursuant to Section 4.03(a), Holdings shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness (or any Restricted Subsidiary so long as portion thereof) in any manner that complies with this Section 4.03 and will only be required to include the incurrence amount and type of such item of Indebtedness incurred by (or any portion thereof) in one of the above clauses and such Restricted Subsidiary is permitted under item of Indebtedness shall be treated as having been Incurred pursuant to only one of such clauses or pursuant to Section 4.03(a). Accrual of interest, the accretion of accreted value, amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms or in the form of this Indenturecommon stock of Holdings, orthe payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, the accretion of original issue discount or liquidation preference and increases in the amount of Ind
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liableIncur, contingently or otherwise (collectivelyotherwise, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) Debt), and the Company Issuer will not issue any shares of Disqualified Stock and will not permit any of its Restricted Subsidiary Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer may incur Incur Indebtedness (including Acquired IndebtednessDebt) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary Guarantor may incur Incur Indebtedness (including Acquired Indebtedness), Debt) or issue shares of Disqualified Stock and issue shares of or Preferred Stock, if the Fixed Charge Consolidated Interest Expense Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 2.0 to 1.00 (the “Fixed Charge Coverage Test”), 1.0 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, Incurred or the Disqualified Stock or and Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions Clause (a) of this Section 4.09(a) hereof 4.09 shall not apply to:prohibit the Incurrence of any of the following items of Indebtedness or Disqualified Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence Incurrence by the Issuer or any of the Subsidiary Guarantors of Indebtedness under Credit Facilities by (including the Company, the Issuer or New Senior Revolving Credit Facility) in an aggregate principal amount at any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder one time outstanding under this clause (1) (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount obligations in respect thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up not to an aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount exceed (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (ia) $5,250.0 million, plus 125 million prior to a Qualifying IPO and (iib) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing$200 million following a Qualifying IPO;
(2) the incurrence Incurrence by the Issuer and any Guarantor the Subsidiary Guarantors of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee and the related Note Guarantees to be issued on the date of the Notesthis Indenture;
(3) Indebtedness of the Company, Incurrence by the Issuer and their the Subsidiary Guarantors of the Second Priority Obligations;
(4) the Incurrence by the Issuer and its Restricted Subsidiaries in existence of the Indebtedness outstanding on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1), (2), (3) and (27) of this Section 4.09(bclause (b));
(45) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred the Incurrence by the Company Issuer or any of its Restricted SubsidiariesSubsidiaries of Indebtedness represented by Capital Lease Obligations, to finance mortgage financings or purchase money obligations, in each case, Incurred for the purchasepurpose of financing all or any part of the purchase price, lease or cost of construction or improvement of property (real or personal) ), plant or equipment that is used in the business of the Issuer or useful in a Similar Business, such Restricted Subsidiary (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets), in an aggregate principal amount, together with any including all Permitted Refinancing Indebtedness in respect thereof and all other IndebtednessIncurred to refund, Disqualified Stock and/or Preferred Stock issued and outstanding under refinance or replace any Indebtedness Incurred pursuant to this clause (45), not to exceed 4.0% of Total Assets exceed, at any time outstanding, 1.5% of Total Assets; so long as such Indebtedness exists at the date of such purchase, lease or improvement improvement, or is created within 270 days thereafter;
(56) Indebtedness incurred the Incurrence by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued Permitted Refinancing Indebtedness in the ordinary course of business, including letters of credit in respect of workers’ compensation claimsexchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other Indebtedness with respect than intercompany Indebtedness) that was permitted by this Indenture to reimbursement type obligations regarding workers’ compensation claims; providedbe Incurred under clause (a) of this Section 4.09 or clauses (2), that upon the drawing (3), (4), (6) or (18) of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrencethis clause (b);
(67) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with Incurrence by the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(contingent obligations referred to in a footnote to financial statements and not otherwise reflected on a) if the balance sheet will not be deemed to be reflected Issuer or any Subsidiary Guarantor is the obligor on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 Indebtedness, any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Subsidiary Guarantor must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Issuer, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee Issuer or a Restricted Subsidiary of the Notes of such Guarantor; provided further that Issuer and (ii) any subsequent sale or other transfer of any such Indebtedness (except to a Person that is not either the Company Issuer or another a Restricted Subsidiary) shall Subsidiary of the Issuer, will be deemed, in each case, to be constitute an incurrence Incurrence of such IndebtednessIndebtedness by the Issuer or such Subsidiary Guarantor, as the case may be, that was not permitted by this clause (7);
(9) 8) the issuance of shares of Preferred Stock of by a Restricted Subsidiary issued to the Company Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which which, in either case, results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its Restricted SubsidiariesSubsidiary) shall be deemed in each case to be an issuance of such shares of Preferred StockStock that was not permitted by this clause (8);
(109) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided Incurrence by the Company Issuer or any of its Restricted Subsidiaries of Hedging Obligations not for speculative purposes;
(10) the guarantee by the Issuer or any of its Restricted Subsidiaries of Indebtedness of the Issuer or a Restricted Subsidiary that was permitted to be Incurred by another provision of this Section 4.09;
(11) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will not be deemed to be an Incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.09; provided, in each such case, that the amount thereof is included in Consolidated Interest Expense of the Issuer as accrued;
(12) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of performance bonds, bank guarantees, bankers’ acceptances, workers’ compensation claims, surety or appeal bonds, payment obligations in connection with self-insurance or similar obligations (and letters of credit in respect thereof) in the ordinary course of business;
(1213) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements providing for indemnification, adjustment of purchase price, earnouts or similar obligations of the Issuer or any of its Restricted Subsidiaries Incurred in connection with the disposition of any business, assets or Subsidiary of the Issuer; provided that such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary and that the maximum liability in respect of all such Indebtedness shall not exceed the gross proceeds actually received by the Issuer or any Restricted Subsidiary in connection with such disposition;
(14) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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, so long as such Indebtedness is extinguished within five Business Days of its Incurrence;
(15) the Incurrence by any Restricted Subsidiary of Indebtedness represented by letters of credit entered into in the ordinary course of business to the extent that such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the tenth Business Day following such drawing or Incurrence;
(16) the Incurrence by the Issuer or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) which, when taken together with all other Indebtedness of the Issuer and its Restricted Subsidiaries outstanding on the date of such Incurrence and Incurred pursuant to this clause (16), does not exceed $50 million; provided that the aggregate principal amount of Indebtedness that may be incurred pursuant to the foregoing by Restricted Subsidiaries that are not Subsidiary Guarantors shall not exceed $25 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock Incurred pursuant to this clause (16) by the Issuer or any Subsidiary Guarantor shall cease to be deemed Incurred or outstanding for purposes of this clause (16) but shall be deemed Incurred for the purposes of the first paragraph of this covenant from and after the first date on which the Issuer or such Subsidiary Guarantor could have Incurred such Indebtedness, Disqualified Stock or Preferred Stock under clause (a) Indebtedness or Disqualified Stock of the Company and this Section 4.09 without reliance on this clause (16));
(17) Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any Restricted Subsidiary equal to 200.0100% of the net cash proceeds received by the Company Issuer since immediately after the Transaction Issue Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies Issuer or cash contributed to the capital of the Company Issuer (in each case, other than Excluded Contributions or proceeds of Disqualified Stock or sales of Equity Interests to the Company Issuer or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses clause (a)(3)(B) of Section 4.07 hereof to make Restricted Payments or to make other Investments, payments or exchanges pursuant to clause (b) of Section 4.07(b) 4.07 hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to set forth in Section 4.09(c) 1.01 hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(1418) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, Issuer or a Restricted Subsidiary Guarantor incurred to finance an acquisition or (y) Persons that are acquired by the Company Issuer or any Restricted Subsidiary Guarantor or merged or amalgamated into the Company Issuer or a Restricted Subsidiary Guarantor in accordance with the terms of this Indenture; provided that after giving effect to such acquisitionacquisition or merger, merger or amalgamation either:
(Aa) the Company Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Consolidated Interest Expense Coverage Test Ratio test set forth in clause (a) of this Section 4.09(a) hereof4.09, or
(Bb) the Fixed Charge Consolidated Interest Expense Coverage Ratio of for the Company Issuer and the its Restricted Subsidiaries is would be equal to or greater than such ratio for the Issuer and its Restricted Subsidiaries immediately prior to such acquisitionacquisition or merger, merger or amalgamationin each case on a pro forma basis taking into account such designation;
(1519) Indebtedness arising consisting of Indebtedness issued by the Issuer or any of its Restricted Subsidiaries to current or former officers, directors and employees thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Issuer or any direct or indirect parent company of the Issuer to the extent described in clause (b)(5) of Section 4.07 hereof; and
(20) customer deposits and advance payments received in the ordinary course of business from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds customers for goods purchased in the ordinary course of business.
(c) For purposes of determining compliance with this Section 4.09:
(i) the outstanding principal amount of any item of Indebtedness shall be counted only once, and any obligation arising under any guarantee, Lien, letter of credit or similar instrument supporting such Indebtedness Incurred in compliance with this covenant shall be disregarded;
(ii) in the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in clauses (a) and (b) of this Section 4.09, the Issuer, in its sole discretion, will classify such item of Indebtedness on the date of Incurrence and only be required to include the amount and type of such Indebtedness in one of such clauses; provided that all Indebtedness outstanding under the New Senior Revolving Credit Facility will be treated as incurred under clause (b)(1) of this Section 4.09 and not clause (a) or clause (b)(3) of this Section 4.09;
(iii) Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included; and
(iv) the amount of Indebtedness 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.
(d) The amount of any Indebtedness outstanding as of any date shall be (i) the accreted value thereof in the case of any Indebtedness issued with original issue discount and (ii) the principal amount or liquidation preference thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.
(e) No Restricted Subsidiary may Incur any Indebtedness if the proceeds are used to refinance Indebtedness of the Issuer. In addition, the Issuer will not permit any of its Unrestricted Subsidiaries to Incur any Indebtedness or issue any shares of Disqualified Stock, other than Non-Recourse Debt.
(f) For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Incurred to refinance other Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, denominated in a principal amount not foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in excess of effect on the stated amount date of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the incurrence principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms being refinanced. Notwithstanding any other provision of this Indenturecovenant, orthe maximum amount of Indebtedness that the Issuer may Incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
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Sources: Indenture (UTAC Holdings Ltd.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly indirectly, liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company Issuer will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, provided that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)if, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter periodTest Period, the Fixed Charge Coverage Ratio of the Issuer for the Issuer’s most recently ended Test Period preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued (or, in the case of Indebtedness under Designated Revolving Commitments, on the date such Designated Revolving Commitments are established after giving pro forma effect to the incurrence of the entire committed amount of Indebtedness thereunder, in which case such committed amount under such Designated Revolving Commitments may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this proviso) would have been at least 2.00 to 1.00; provided that the amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors under this Section 4.09(a) shall not exceed at any one time outstanding, in the aggregate, (together with all Indebtedness incurred under clause (22) below by Restricted Subsidiaries of the Issuer that are not Guarantors) the greater of (x) $300.0 million and (y) 47.0% of Consolidated EBITDA of the Issuer for the most recently ended Test Period (calculated on a pro forma basis).
(b) The provisions of Section 4.09(a) hereof shall will not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of (including letters of credit and or bankers’ acceptances thereunder issued or created thereunder) pursuant to any Credit Facility (with letters of credit and bankers’ acceptances being deemed to have a including, without limitation, any Senior Credit Facility) in an aggregate outstanding principal amount equal not to exceed the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with sum of:
(A) the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (i) $5,250.0 million, plus 1,050.0 million and (ii) €750.0 millionthe Borrowing Base as of, plus (iii) at the option of the Issuer at any time and from time to time, the applicable date of determination, the Issue Date, the date of execution of the documentation governing such Indebtedness or the date of the incurrence of such Indebtedness or, in the case of any refinancing Limited Condition Transaction, the date of execution of the commitment letter in respect of such Indebtedness and measured on a pro forma basis after giving effect to any increase in the Borrowing Base that will result from such acquisition; plus
(B) $1,670.0 million; plus
(C) the greater of (i) $650.0 million and (ii) 100.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a pro forma basis) at the time of such incurrence; plus
(D) unlimited amounts, so long as in the case of this clause (1)(D) only, after giving pro forma effect thereto, the Senior Secured Net Leverage Ratio as of the most recently ended Test Period shall be no greater than 3.25 to 1.00 (provided that for purposes of determining the amount that may be incurred under this clause (1)(D), any cash proceeds of any new Indebtedness permitted then being incurred shall not be netted from the numerator in the Senior Secured Net Leverage Ratio for purposes of calculating the Senior Secured Net Leverage Ratio under this clause (1)(D) for purposes of determining whether such Indebtedness can be incurred); provided that any Indebtedness incurred under this Section 4.09(b)(1) may be extended, replaced, refunded, refinanced, renewed or defeased (including through successive extensions, replacements, refundings, refinancings, renewals and defeasances) with new Indebtedness so long as the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the sum of (x) the principal amount (or accreted value, if applicable) of the Indebtedness being so extended, replaced, refunded, refinanced, renewed or defeased (including an amount equal to any unutilized commitments being refinanced to the extent permanently terminated at the time of incurrence of such Refinancing Indebtedness to the extent the unutilized commitment being refinanced could be drawn in compliance with this Section 4.09 immediately prior to such refinancing), plus (y) any accrued and unpaid interest on the Indebtedness being refinanced, plus (z) the amount of any tender premium or penalty or premium required to be paid under the terms of the instrument or documents governing such refinanced Indebtedness and any defeasance costs and any fees and expenses (including original issue discount, upfront fees, underwriting, arrangement and similar fees) incurred in connection with the incurrence of such new Indebtedness or the extension, replacement, refunding, refinancing, renewal or defeasance of such refinanced Indebtedness; provided further that for purposes of determining the amount that may be incurred under this clause (1), all Indebtedness incurred under clause (1)(D) or any portion thereof, shall be deemed to be included in clause (a) of the aggregate amount definition of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing“Senior Secured Net Leverage Ratio”;
(2) the incurrence by the Issuer and any Subsidiary Guarantor of Indebtedness represented by the Notes and related Guarantees (not including but excluding any Additional NotesNotes issued after the Issue Date), including any Guarantee of the Notes;
(3) the incurrence of Indebtedness of the Company, by the Issuer and their Subsidiaries in existence any Restricted Subsidiary that is (a) represented by the Existing Senior Notes (other than any “Additional Notes” issued under the Existing Senior Notes Indenture) or (b) otherwise outstanding on the Issue Date or (excluding, for the Merger Date (other than avoidance of doubt, Indebtedness described in clauses (1incurred under Sections 4.09(b)(1) and (2) of this Section 4.09(b));
(4) (x)(a) the incurrence of Attributable Indebtedness and (b) Indebtedness (including Capitalized Lease Obligations and Purchase Money Obligations), ) and Disqualified Stock incurred or issued by the Issuer or any Restricted Subsidiary and Preferred Stock incurred issued by the Company or any of its Restricted Subsidiaries, Subsidiary to finance the purchase, lease lease, expansion, construction, installation, replacement, repair or improvement of property (real or personal) ), equipment or equipment other assets, including assets that is are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock incurred or issued and outstanding under this clause (4)) at such time, not to exceed 4.0(as of the date such Indebtedness, Disqualified Stock and/or Preferred Stock is issued, incurred or otherwise obtained) the greater of (i) $200.0 million and (ii) 31.0% of Total Assets at Consolidated EBITDA of the Issuer and the Restricted Subsidiaries for the most recently ended Test Period (calculated on a pro forma basis) and (y) any time outstanding; so long as such Refinancing Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterin respect thereof;
(5) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries Subsidiary (a) constituting reimbursement obligations with respect to letters of credit credit, bank guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of businessbusiness or consistent with industry practice and otherwise in compliance with the terms of this Indenture, including letters of credit in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, unemployment insurance or other social security legislation or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims; provided, that upon the drawing performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or (b) as an account party in respect of such letters of credit credit, bank guarantees or similar instruments in favor of suppliers, trade creditors or other Persons issued or incurred in the incurrence ordinary course of such Indebtedness, such obligations are reimbursed within 30 days following such drawing business or incurrenceconsistent with industry practice;
(6) the incurrence of Indebtedness arising from agreements of the Company Issuer or its any Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) the incurrence of Indebtedness of by the Company Issuer and owing to a Restricted Subsidiary or the issuance of Disqualified Stock of the Issuer to a Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to any Restricted Subsidiary); provided that any such Indebtedness for borrowed money owing to a Restricted Subsidiary that is not a Subsidiary Guarantor (other than the Issuer) is expressly subordinated in right of payment to the NotesNotes to the extent permitted by applicable law; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness or Disqualified Stock (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness or Disqualified Stock constituting a Permitted Lien) shall will be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness (to the extent such Indebtedness is then outstanding) or issuance of such Disqualified Stock (to the extent such Disqualified Stock is then outstanding) not permitted by this Section 4.09(b)(7);
(8) the incurrence of Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Issuer or any Restricted Subsidiary); provided that if a Guarantor incurs any such Indebtedness for borrowed money incurred by a Subsidiary Guarantor and owing to a Restricted Subsidiary that is not a Subsidiary Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such GuarantorSubsidiary Guarantor to the extent permitted by applicable law; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any such subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien) will be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this Section 4.09(b)(8);
(9) the issuance of shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Issuer or any Restricted Subsidiary); provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary that holds such Preferred Stock or Disqualified Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock or Disqualified Stock (except to the Company Issuer or another Restricted Subsidiary or any pledge of its Restricted Subsidiariessuch Preferred Stock or Disqualified Stock constituting a Permitted Lien) shall will be deemed deemed, in each case case, to be an issuance of such shares of Preferred StockStock or Disqualified Stock (to the extent such Preferred Stock or Disqualified Stock is then outstanding) not permitted by this Section 4.09(b)(9);
(10) the incurrence of Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk);
(11) the incurrence of obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance, banker’s acceptance facilities and completion guarantees and similar obligations provided by the Company Issuer or any Restricted Subsidiary or obligations in respect of its Restricted Subsidiaries letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of businessbusiness or consistent with industry practice, including those incurred to secure health, safety and environmental obligations;
(12) (a) the incurrence of Indebtedness or issuance of Disqualified Stock of the Company Issuer and the incurrence or issuance of Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal in an aggregate principal amount or liquidation preference up to 200.0100.0% of the net cash proceeds received by the Company Issuer and its Restricted Subsidiaries since immediately after the Transaction Date December 19, 2013 from the issue or sale of Equity Interests of the Company Issuer and the Subsidiary Guarantors or any of its direct or indirect parent companies or cash contributed contributions to the capital of the Company Issuer and the Subsidiary Guarantors including through consolidation, amalgamation or merger (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company Issuer or any of its SubsidiariesRestricted Subsidiary) as determined in accordance with clauses (3)(BSections 4.07(a)(3)(B) and (3)(C) (determined, solely for purposes of Section 4.07(athis clause (12)(a), as if the “Reference Date” were December 19, 2013) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b4.07(a) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses clause (1), (2) and or (3) of the definition thereof) and ); and
(b) (x) the incurrence of Indebtedness or issuance of Disqualified Stock of the Company Issuer and the incurrence or issuance of Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencepreference that, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued, as applicable, pursuant to this clause (12)(b), ) does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes as of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 is issued, incurred or otherwise obtained) (a) hereof without reliance on this clause (12)(b));
(13i) the incurrence by greater of (x) $325.0 million and (y) 50.0% of Consolidated EBITDA of the Company Issuer and the Restricted Subsidiaries for the most recently ended Test Period (calculated on a pro forma basis); plus, without duplication, (ii) in the event of any extension, replacement, refinancing, renewal or defeasance of any Restricted Subsidiary, of such Indebtedness, Disqualified Stock or Preferred Stock which serves Stock, an amount equal to refund or refinance (x) any accrued and unpaid interest on the Indebtedness, any accrued and unpaid dividends on the Preferred Stock, and any accrued and unpaid dividends on the Disqualified Stock being so refinanced, extended, replaced, refunded, renewed or Preferred Stock incurred as permitted defeased plus (y) the amount of any tender premium or penalty or premium required to be paid under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) the terms of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) the instrument or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance documents governing such Indebtedness, Disqualified Stock or Preferred Stock and any defeasance costs and any fees and expenses (including additional original issue discount, upfront fees, underwriting, arrangement and similar fees) incurred in connection with the issuance of such new Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums)or the extension, replacement, refunding, refinancing, renewal or defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that of such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
Stock; and (By) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuerthereof;
(ii13) Indebtedness, Disqualified Stock the incurrence or Preferred Stock issuance by the Issuer of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor Refinancing Indebtedness or the Issuer; or
(iii) Indebtedness, Disqualified Stock incurrence or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orissuan
Appears in 1 contract
Sources: Indenture (Michaels Companies, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Parent shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) ), and the Company will Parent shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Parent may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Consolidated Fixed Charge Coverage Ratio on a consolidated basis for the Company Parent and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a4.10(a) hereof shall not apply to:
(1) the incurrence by the Parent or a Restricted Subsidiary of Indebtedness under Credit Facilities together with the incurrence by the Company, the Issuer Parent or any other Restricted Subsidiary of the guarantees thereunder and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one timeamount, when taken together with equal to (x) the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (i) $5,250.0 million3,200 million and (ii) the Borrowing Base at the time of incurrence, plus (iiy) €750.0 $1,500 million, plus (iii) less, in the case of clause (y), the amount of all mandatory principal payments or repurchases actually made by the borrower thereunder in respect of Indebtedness thereunder with the net proceeds from asset sales, plus (z) any premium, accrued interest on, or related fees and expenses incurred in connection with any refinancing of any Indebtedness permitted under incurred pursuant to this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing);
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee of the Notes;
(3) Indebtedness of the Company, Parent and its Restricted Subsidiaries in respect of (i) the Issuer Notes and their Subsidiaries the Guarantees issued on the Issue Date and (ii) other Indebtedness in existence on the Issue Date or (excluding (i) Capitalized Lease Obligations in existence on the Merger Issue Date (other than Indebtedness described in clauses (1) and (2ii) of this Section 4.09(b)Indebtedness under the Specified Credit Facilities);
(43) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and or Preferred Stock incurred by the Company Parent or any of its Restricted Subsidiaries, Subsidiary to finance the purchase, lease lease, construction, or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, Permitted Business (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets), in an aggregate principal amountamount that, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or Preferred Stock issued then outstanding and outstanding under incurred pursuant to this clause (43) and, if applicable, Section 4.10(c)(5) hereof (including Issuer Refinancing Indebtedness outstanding pursuant to Section 4.10(c)(14) hereof in respect of Indebtedness originally incurred under Section 4.10(c)(5) hereof), does not to exceed 4.0the greater of (x) $400.0 million and (y) 5% of Total Assets at any time outstanding; so long of the Parent, determined as such Indebtedness exists at of the date of such purchase, lease or improvement or is created within 270 days thereafterany incurrence pursuant to this clause (3);
(54) Indebtedness incurred by the Company Parent or any of its Restricted Subsidiaries Subsidiary constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; provided, provided that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(65) Indebtedness arising from agreements of the Company Parent or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts earn-outs or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; providedprovided that in the case of a disposition, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of such non-cash noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company Parent and its any Restricted Subsidiaries in connection with such a disposition;
(76) Indebtedness of the Company Parent owed to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by the Parent or any other Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Parent or another a Restricted Subsidiary) shall be deemed, in each case, to be an constitute the incurrence of such IndebtednessIndebtedness by the issuer thereof;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(97) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Parent or another a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Parent or another of its a Restricted SubsidiariesSubsidiary) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(10) 8) Hedging Obligations of the Parent or any Restricted Subsidiary (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting limiting, hedging or managing (A) interest rate risk rates with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09outstanding, (B) currency exchange rate risk rates or (C) commodity pricing riskprices or otherwise entered into in the ordinary course of business (in each case, including Hedging Obligations on behalf of the Parent or any Subsidiary of the Parent);
(119) self-insurance and obligations in respect of performance, bid, appeal and surety bonds, appeal bonds and other similar types of bonds and performance and completion guarantees and similar obligations provided by the Company Parent or any Restricted Subsidiary or obligations in respect of its Restricted Subsidiaries letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of businessbusiness or consistent with past practice;
(12) (a10) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock Parent or any Restricted Subsidiary or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencepreference which, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b)10) and, if applicable, clause (12) of Section 4.10(c) hereof, does not at exceed as of the date of any one time outstanding incurrence pursuant to this clause (10), the sum of:
(A) $150.0 million; plus
(B) the amount (not to exceed $900.0 million 100.0 million) equal to the aggregate of each difference (it being understood if positive) between (x) the aggregate principal amount of funded Indebtedness of the Parent and its Restricted Subsidiaries outstanding on the Issue Date under any debt facility minus (y) the amount of funded Indebtedness incurred to permanently refinance any such debt facility subsequent to the Issue Date; and any premium, accrued interest on, or related fees and expenses incurred in connection with any refinancing of Indebtedness incurred pursuant to this clause (10); provided that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b10) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b10) but shall be deemed incurred for the purposes of Section 4.09(a4.10(a) hereof from and after on the first date on which after the Company date of incurrence of such Indebtedness that the Parent or such Restricted Subsidiary could have incurred would be permitted to incur such Indebtedness, Disqualified Stock or Preferred Stock under pursuant to such Section 4.09 (a) hereof without reliance on this clause (12)(b)4.10(a);
(1311) any guarantee by the Parent or a Restricted Subsidiary of Indebtedness or other obligations of the Parent or any Restricted Subsidiary so long as the incurrence of such Indebtedness or other obligations incurred by the Parent or such Restricted Subsidiary is permitted under the terms of this Indenture;
(12) the incurrence or issuance by the Company Parent or any Restricted Subsidiary, Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which that serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued as permitted under Section 4.09(a4.10(a) hereof and clauses (2), (3), (4Section 4.10(b)(2) and (12)(a) of this Section 4.09(b)hereof, this clause (1312) and clause clauses (1420) of this Section 4.09(band (21) below or any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock Stock, including additional Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to pay accrued interest, premiums (including reasonable tender premiums), defeasance costs and fees and expenses in connection therewith prior to its respective maturity (it being understood that Indebtedness, Disqualified Stock or Preferred Stock of the Parent or any Restricted Subsidiary may be refunded or refinanced by Indebtedness, Disqualified Stock or Preferred Stock of the Parent or any Restricted Subsidiary) (the “Refinancing Indebtedness”) prior to its respective maturity); provided, provided that such Refinancing Indebtedness:
Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
, (B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances include Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company Parent or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
, (14C) shall not be in a principal amount in excess of the principal amount of, premium, if any, accrued interest on, and related fees and expenses of, the Indebtedness being refunded or refinanced, (D) if the Indebtedness being refunded or refinanced is Subordinated Indebtedness, such Refinancing Indebtedness shall be Subordinated Indebtedness and (E) for avoidance of doubt, shall not include Indebtedness of the Issuer or its Restricted Subsidiaries that refinances Indebtedness, Disqualified Stock or Preferred Stock of (xthe Parent unless such refinancing is permitted by Section 4.10(c) the Company or, subject to Section 4.09 (c) and 4.07 hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(1513) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business;
(14) Indebtedness consisting of promissory notes issued by the Parent or any Restricted Subsidiary to current or former officers, provided that such Indebtedness is extinguished within five Business Days directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of the Parent or any of its incurrencedirect or indirect parent companies permitted by Section 4.07 hereof;
(15) Indebtedness of the Parent or any Restricted Subsidiary consisting of the financing of insurance premiums in the ordinary course of business or take or pay obligations contained in supply agreements incurred in the ordinary course of business;
(16) Indebtedness of the Company Parent or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the any Credit FacilitiesFacility or a similar instrument, in a principal amount not in excess of the stated amount of such letter of creditcredit or similar instrument;
(17) Indebtedness consisting of deferred purchase price or notes issued to officers, directors and employees of Restricted Subsidiaries to purchase or redeem equity interests (Aor option or warrants or similar instruments) of the Parent or a Restricted Subsidiary;
(18) Indebtedness issued as consideration for the repurchase or redemption of Capital Stock (other than Disqualified Stock) of the Parent in transactions to repurchase or redeem Capital Stock (other than Disqualified Stock) of the Parent (or its direct parent company) held by officers, directors or employees or former officers, directors or employees (or their transferees, estates or beneficiaries under their estates) of the Parent or any guarantee by Subsidiary thereof, upon their death, disability, retirement, severance or termination of employment or service;
(19) guarantees constituting Investments permitted pursuant to clauses (7) or (18) of the Company definition of “Permitted Investments”;
(20) Indebtedness or Disqualified Stock of the Parent and Indebtedness, Disqualified Stock or Preferred Stock of the Parent or a Restricted Subsidiary in an aggregate principal amount or liquidation preference, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (20) and any Issuer Refinancing Indebtedness in respect thereof then outstanding and incurred pursuant to clause (12) above, up to 100% of the net cash proceeds received by the Parent and the Restricted Subsidiaries since immediately after the Issue Date from the issue or sale of Equity Interests of the Parent or cash contributed to the capital of the Parent or any direct or indirect parent of the Parent (which proceeds are contributed to the Parent) (in each case, other obligations than (x) proceeds with respect to which any Indebtedness has been incurred pursuant to Section 4.10(c)(21) hereof, (y) Excluded Contributions or (z) proceeds of Disqualified Stock or sales of Equity Interests to or any contribution received from any Restricted Subsidiary) as determined in accordance with clauses (3)(b) and (3)(e) of Section 4.07(a) hereof; or
(21) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Parent or a Restricted Subsidiary incurred or assumed to finance an acquisition or (y) Persons that are acquired by the Parent or any Restricted Subsidiary so long as in accordance with the incurrence terms of this Indenture; provided that after giving effect to such acquisition, either
(a) the Parent would be permitted to incur at least $1.00 of additional Indebtedness incurred by pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in Section 4.10(a); or
(b) the Consolidated Fixed Charge Coverage Ratio is equal to or greater than immediately prior to such acquisition or merger.
(c) Notwithstanding any of the foregoing, the Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness), and the Issuer will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock, unless (i) the Issuer or such Restricted Subsidiary is permitted under the terms to incur such Indebtedness, Disqualified Stock or Preferred Stock pursuant to Section 4.10(a) or Section 4.10(b) of this Indenture, orand (ii) such Indebtedness, Disqualified Stock or Preferred Stock consists of:
(1) Indebtedness, Disqualified Stock or Preferred Stock of Spain Propco in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount and liquidation pr
Appears in 1 contract
Sources: Indenture (Toys R Us Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (ai) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Issuer shall not permit any of its Restricted Subsidiary Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer, and any Restricted Subsidiary that is a Guarantor may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and the Issuer and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of the Issuer for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by the Issuer or its Restricted Subsidiaries of Indebtedness under Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount outstanding at any one time, when taken together with time not to exceed the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (ia) $5,250.0 million, plus 1,750.0 million or (b) the Borrowing Base;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer and any Guarantor the Guarantors of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee of and the Notesrelated Note Guarantees to be Incurred on or prior to the Issue Date;
(3iii) the Existing Indebtedness of the Company, the Issuer and their Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b))its Restricted Subsidiaries;
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred Incurred by the Company or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or (other than letters of credit issued under the incurrence of such IndebtednessCredit Agreement), such obligations are reimbursed within 30 days following such drawing or incurrencedrawing;
(6v) Indebtedness arising from agreements of the Company Issuer or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts non-competes or similar obligations, in each case, incurred or assumed Incurred in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such dispositionIssuer;
(7vi) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing owed to a Restricted Subsidiary that is not a Guarantor (other than or the Issuer) Issuer is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except Obligations with respect to the Company or another Restricted Subsidiary) shall be deemedNotes and the Note Guarantees; provided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(vii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10viii) Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary; provided that if a Guarantor or the Issuer incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor or the Issuer, such Indebtedness is subordinated in right of payment to the Obligations with respect to the Notes and the related Note Guarantee; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(ix) Hedging Obligations (excluding Hedging Obligations entered into of the Issuer or a Restricted Subsidiary that are Incurred in the ordinary course of business and not Incurred for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11x) obligations in respect of performance, bid, appeal appeal, custom and surety bonds and completion guarantees provided by the Company Issuer or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness business or Disqualified Stock in connection with the enforcement of rights or claims of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company Issuer or any of its direct Restricted Subsidiaries;
(xi) any Guarantee by the Issuer or indirect parent companies a Restricted Subsidiary of Indebtedness or cash contributed to the capital other obligations of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company Issuer or any of its Subsidiaries) Restricted Subsidiaries so long as determined in accordance with clauses (3)(B) and (3)(C) the Incurrence of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as is permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Note Guarantee of such Guarantor, as applicable, any such Guarantee of the Issuer or such Subsidiary Guarantor with respect to such acquisition, merger or amalgamation either
(A) the Company would Indebtedness shall be permitted to incur at least $1.00 subordinated in right of additional Indebtedness pursuant payment to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereofNotes or such Guarantor’s Note Guarantee with respect to the Notes, or
(B) as applicable, to the Fixed Charge Coverage Ratio same extent as such Indebtedness is subordinated to the Notes or the Note Guarantee of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisitionGuarantor, merger or amalgamationas applicable;
(15xii) Indebtedness of the Issuer or a Restricted Subsidiary arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five (5) Business Days of its incurrenceIncurrence;
(16xiii) Indebtedness of the Company Incurrence by the Issuer or any of its Restricted Subsidiaries supported by of Indebtedness or the issuance of Disqualified Stock or Preferred Stock of a letter Restricted Subsidiary of credit the Issuer which serves to extend, refund, refinance, renew, replace or defease any Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any of its Restricted Subsidiaries Incurred or issued as permitted in Section 4.03(a) and clauses (ii), (iii), (xiv), (xvi), (xviii) and (xix) of this Section 4.03(b) or any Indebtedness Incurred or Disqualified Stock or Preferred Stock Incurred or issued pursuant to this clause (xiii) to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock (subject to the Credit Facilitiesfollowing proviso, in “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(1) has a principal amount Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not in excess less than the shorter of (x) the remaining Weighted Average Life to Maturity of the stated amount Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced that were due on or after the date one year following the last maturity date of the Notes then outstanding were instead due on such letter date one year following the last date of creditmaturity of the Notes;
(172) to the extent such Refinancing Indebtedness refinances (Aa) any guarantee by Indebtedness subordinated in right of payment to the Company Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is subordinated in right of payment to the Notes or the Note Guarantees of such Restricted Subsidiary, as applicable or (b) Disqualified Stock or Preferred Stock, if such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;
(3) is Incurred in an aggregate principal amount or face or liquidation amount (or if issued with original issue discount, an aggregate accreted price) that is equal to or less than the aggregate principal amount or face or liquidation amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced, renewed, replaced or defeased plus all accrued interest and premium, fees and expenses Incurred in connection with such refinancing, refunding, renewing, replacement or defeasance; and
(4) shall not include (x) Indebtedness of a Restricted Subsidiary of the Issuer that is not a Guarantor or the Issuer that refinances Indebtedness of the Issuer or a Restricted Subsidiary that is a Guarantor or the Issuer, or (y) Indebtedness of the Issuer or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary;
(xiv) Indebtedness of the Issuer or any of its Restricted Subsidiaries represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, Incurred on or after the Issue Date and no later than 180 days after the date of purchase or completion of construction, improvement, repair or replacement of property (real or personal), plant or equipment used in the business of the Issuer or any Restricted Subsidiary for the purpose of financing all or any part of the purchase price or cost thereof (where, in the case of a purchase, such purchase may be effected directly or through the purchase of the Capital Stock of the Person owning such property, plant and equipment), in the aggregate principal amount, including all Refinancing Indebtedness permitted to be Incurred under this Indenture to refund, refinance, renew or defease or replace any Indebtedness Incurred pursuant to the provision described in this clause (xiv), not to exceed the greater of (a) $150.0 million or (b) 5.50% of Total Assets, as of the date of such incurrence;
(xv) Indebtedness of the Issuer or any Restricted Subsidiary, to the extent the net proceeds thereof are promptly deposited to defease, redeem or to satisfy and discharge the Notes;
(xvi) the Incurrence of Acquired Indebtedness or other obligations Indebtedness incurred in connection with, or in contemplation of, an acquisition (including by way of merger or consolidation) by the Issuer or a Restricted Subsidiary; provided that, after giving effect to the transactions that result in the Incurrence or issuance thereof, the Fixed Charge Coverage Ratio would be equal to or greater than immediately prior to such transactions and Incurrence;
(xvii) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is without recourse to the Issuer or any Restricted Subsidiary so long other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xviii) Indebtedness or Disqualified Stock or Preferred Stock of the Issuer or any of its Restricted Subsidiaries in an aggregate principal amount or liquidation preference, including the Refinancing Indebtedness permitted to be Incurred under this Indenture to refund, refinance, renew, replace or defease any Indebtedness, Disqualified Stock or Preferred Stock Incurred pursuant to this clause (xviii), not to exceed the greater of (a) $150.0 million or (b) 5.50% of the Total Assets, as of the incurrence date of such incurrence;
(xix) the Incurrence by any Foreign Subsidiary of Indebtedness in an aggregate principal amount or liquidation preference, including the Refinancing Indebtedness permitted to be Incurred under this Indenture to refund, refinance, renew, replace or defease any Indebtedness Incurred pursuant to this clause (xix), not to exceed the greater of (a) $150.0 million or (b) 5.50% of the Total Assets, as of the date of such incurrence;
(xx) Indebtedness Incurred by the Issuer or any of its Restricted Subsidiaries consisting of obligations to pay insurance premiums or take-or-pay obligations contained in supply arrangements Incurred in the ordinary course of business;
(xxi) Indebtedness in respect of overdraft facilities, employee credit card programs and other cash management arrangements Incurred in the ordinary course of business;
(xxii) Indebtedness representing deferred compensation or equity-based compensation to current or former officers, directors, consultants, advisors or employees of the Issuer or any of its Restricted Subsidiaries Incurred in the ordinary course of business and Indebtedness issued by the Issuer or any of its Restricted Subsidiaries to current or former officers, directors, consultants, advisors or employees thereof (or their spouses or former spouses or heirs, trusts, estates or beneficiaries under their estates) to finance the purchase or redemption of Equity Interests of the Issuer or any direct or indirect parent company of the Issuer to the extent permitted by Section 4.04(b)(vii) hereof;
(xxiii) cash management obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case in connection with deposit accounts; and
(xxiv) Indebtedness incurred by such Tilibra or other Restricted Subsidiary is permitted organized under the terms laws of Brazil in connection with the Specified Brazilian Tax Payment. For purposes of determining compliance with this Section 4.03, in the event that an item, or a portion of such item, taken by itself, of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xxiv) above or such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a), the Issuer shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness in any manner that complies with this Section 4.03; provided that all Indebtedness outstanding under the Credit Agreement on the Issue Date shall be deemed to have been Incurred pursuant to Section 4.03(b)(i). Accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be deemed to be an Incurrence of Indebtedness for purposes of this IndentureSection 4.03. Guarantees of, oror obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such Guarantee or letter of credit, as the case may be, was in compliance with this Section 4.03. For purposes of determining compliance with any U.S. dollar denominated restriction on the Incurrence of Indebtedness where the Indebtedness Incurred, or any Indebtedness outstanding pursuant to the clause or clauses of the categories of permitted Indebtedness described in clauses (i) through (xxiv) of (b)) under which such Indebtedness is being Incurred, is denominated in a different currency, the amount of any such Indebtedness being Incurred and such outstanding Indebtedness, if any, will in each case be the U.S. Dollar Equivalent determined on the date any such Indebtedness was Incurred, in the case of term Indebtedness, or first committed or first Incurred (whichever yields the lower U.S. Dollar Equivalent), in the case of revolving credit Indebtedness, which U.S. Dol
Appears in 1 contract
Sources: Indenture (ACCO BRANDS Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Leverage Ratio on a consolidated basis for the Company Issuer and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 less than 4.5 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions limitations of Section 4.09(a3.2(a) hereof shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other Restricted of the Subsidiary Guarantors and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount of $600.0 million outstanding at any one time, when taken together with less the aggregate principal amount of all principal repayments with the proceeds from Asset Sales made pursuant to Section 3.5(b)(1)(a) and (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iiib) in satisfaction of the case requirements of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingSection 3.5;
(2) the incurrence by the Issuer and any Subsidiary Guarantor of Indebtedness represented by the Notes (not including any Guarantee) (other than any Additional Notes), including ) and exchange notes issued in respect of such Notes and any Guarantee of the Notesthereof;
(3) Indebtedness of the Company, the Issuer and their its Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1Sections 3.2(b)(1) and (2) of this Section 4.09(b3.2(b)(2));
(4) Indebtedness (including Capitalized Lease Obligations)) incurred or, Disqualified Stock and Preferred Stock incurred issued by the Company Issuer or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an assets; provided that the aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other amount of Indebtedness, Disqualified Stock and/or and Preferred Stock issued and outstanding under incurred pursuant to this clause (4Section 3.2(b)(4), when aggregated with the outstanding amount of Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to Section 3.2(b)(13) to refinance Indebtedness, Disqualified Stock and Preferred Stock initially incurred in reliance on this Section 3.2(b)(4), does not to exceed 4.0the greater of $30.0 million and 1.5% of the Issuer’s Total Assets at any one time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company Issuer or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that
(A) such Indebtedness is not reflected on the balance sheet of the Company Issuer, or any of its Restricted Subsidiaries prepared in accordance with GAAP (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will shall not be deemed to be reflected on such balance sheet for purposes of this clause (6) (aSection 3.2(b)(6)(A)); and
(B) with respect to a disposition, the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company Issuer and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Non-Guarantor Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this Section 3.2(b)(7);
(8) Indebtedness of a Restricted Subsidiary owing to the Company Issuer or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness owing to a Restricted Subsidiary that is not a Non-Guarantor (other than the Issuer)Subsidiary, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Subsidiary Guarantor; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this Section 3.2(b)(8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred StockStock not permitted by this Section 3.2(b)(9);
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09risk, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
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Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company (i) Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) Holdings shall not permit any of its Restricted Subsidiary Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and Holdings and any Restricted Subsidiary that is a Guarantor may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and the Company and Holdings and any Restricted Subsidiary that is a Guarantor may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of Holdings for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by Holdings or its Restricted Subsidiaries of Indebtedness under the Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $1,950 million outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus ;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer Company and any Guarantor the Guarantors of Indebtedness represented by the Notes (not including any Additional Notes)Original Securities and the Guarantees, including any Guarantee of the Notesas applicable;
(3iii) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b));
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company Holdings or any of its Restricted Subsidiaries, Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and Indebtedness then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed 4.03% of Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company Holdings or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtednesscredit, such obligations are reimbursed within 30 days following such drawing or incurrencedrawing;
(6vi) Indebtedness arising from agreements of the Company Holdings or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the disposition of any business, assets or a SubsidiarySubsidiary of Holdings in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company Holdings to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notesobligations of Holdings under its Guarantee; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Holdings or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to Holdings or another Restricted Subsidiary; provided that (1) any such Indebtedness is made pursuant to an intercompany note and (2) if a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary lending such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are Incurred in the ordinary course of business (excluding Hedging Obligations entered into and not for speculative purposes): (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases;
(11xi) obligations in respect of performance, bid, appeal bid and surety bonds and completion guarantees provided by the Company Holdings or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company Holdings or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary Holdings not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencewhich, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed $175 million at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Indebtedness Incurred under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which Holdings, or the Company or such Restricted Subsidiary Subsidiary, as the case may be, could have incurred Incurred such Indebtedness, Disqualified Stock or Preferred Stock Indebtedness under Section 4.09 (a4.03(a) hereof without reliance on upon this clause (12)(bxii));
(13xiii) the incurrence any guarantee by the Company or a Guarantor of Indebtedness or other obligations of Holdings or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by Holdings or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Securities or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of Indebtednesssuch Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantor’s Guarantee with respect to the Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Guarantee of such Restricted Subsidiary, Disqualified Stock as applicable;
(xiv) the Incurrence by Holdings or Preferred Stock any of its Restricted Subsidiaries of Indebtedness which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred Indebtedness Incurred as permitted under Section 4.09(a▇▇▇▇▇▇▇ ▇.▇▇(▇) hereof and clauses ▇▇▇ ▇▇▇▇▇▇▇ (2▇▇), (3▇▇▇), (4▇▇), (▇▇) and (12)(axx) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock Indebtedness issued to so refund or refinance such IndebtednessIndebtedness (subject to the following proviso, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock Indebtedness being refunded or refinanced,;
(B2) has a Stated Maturity which is no earlier than the Stated Maturity of the Indebtedness being refunded or refinanced;
(3) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu junior to the Notes Securities or any the Guarantee thereofof such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes Securities or the Guarantee at least of such Restricted Subsidiary, as applicable;
(4) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the same extent as aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium and fees Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of Holdings that is not the Company or refunded a Guarantor that refinances Indebtedness of the Company or a Guarantor, or (iiy) Disqualified Stock Indebtedness of Holdings or Preferred Stock, such Refinancing a Restricted Subsidiary that refinances Indebtedness must be Disqualified Stock or Preferred Stock, respectively,of an Unrestricted Subsidiary; and
(C6) in the case of any Refinancing Indebtedness in respect Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of Indebtedness under the Senior Credit Facilitiesthis Section 4.03(b), the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required deemed to have been Incurred and to be incurred substantially contemporaneously with the related refinancing outstanding under such clause (iv) or (xx) of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoingthis Section 4.03(b), as applicable, within 45 days following the incurrence and not this clause (xiv) for purposes of determining amounts outstanding under such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect clauses (iv) and (xx) of the Senior Credit Facilitiesthis Section 4.03(b); provided, such Notesfurther, NXP Notes or Existing Secured Note, or Refinancing Indebtedness that subclauses (1) and (2) of any of the foregoing, as applicable, and
this clause (Dxiv) shall not include:
(i) apply to any refunding or refinancing of any Secured Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(iixv) Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Holdings or any of its Restricted Subsidiary Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided provided, however, that such Indebtedness or Disqualified Stock is not Incurred in contemplation of such acquisition or merger or to provide all or a portion of the funds or credit support required to consummate such acquisition or merger; provided, further, however, that after giving effect to such acquisition, merger or amalgamation acquisition and the Incurrence of such Indebtedness either:
(A1) the Company Holdings would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or would be greater than immediately prior to such acquisition, merger or amalgamation;
(15xvi) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five two Business Days of its incurrenceIncurrence;
(16xvii) Indebtedness of the Company Holdings or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit issued pursuant to the Senior Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17xviii) Contribution Indebtedness;
(Axix) any guarantee by Indebtedness of Foreign Subsidiaries not otherwise permitted hereunder, provided, however, that the Company or a Restricted Subsidiary aggregate principal amount of Indebtedness Incurred under this clause (xix), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xix), does not exceed the greater of (x) $250 million and (y) 10% of the consolidated assets of the Foreign Subsidiaries; and
(xx) Indebtedness of Holdings or other obligations of any Restricted Subsidiary so long consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business.
(c) Notwithstanding the foregoing, neither the Company nor any Guarantor may Incur any Indebtedness pursuant to Section 4.03(b) if the proceeds thereof are used, directly or indirectly, to repay, prepay, redeem, defease, retire, refund or refinance any Subordinated Indebtedness unless such Indebtedness shall be subordinated to the Securities or such Guarantor’s Guarantee, as applicable, to at least the same extent as such Subordinated Indebtedness. For purposes of determining compliance with this Section 4.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xx) above or is entitled to be Incurred pursuant to Section 4.03(a), Holdings shall, in its sole discretion, classify or reclassify such item of Indebtedness in any manner that complies with this Section 4.03 and such item of Indebtedness shall be treated as having been Incurred pursuant to only one of such clauses or pursuant to Section 4.03(a); provided that all Indebtedness under the Senior Credit Facilities outstanding on May 6, 2009 shall be deemed to have been Incurred pursuant to clause (i) and Holdings shall not be permitted to reclassify all or any portion of such Indebtedness. Accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.03. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which are otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of case may be, was in compliance with this Indenture, orSection 4.03.
Appears in 1 contract
Sources: Indenture (Nalco Holding CO)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall Borrower will not, and shall will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) ), with respect to any Indebtedness (including Acquired Indebtedness) ), and the Company Borrower will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, provided that so long as no Event of Default has occurred and is continuing the Company Borrower may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and or issue shares of Preferred Stock, if the Fixed Charge Borrower’s Interest Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ Borrower’s most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued Test Period would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of the proceeds therefrom had occurred at the beginning of such four-quarter periodTest Period; provided, further, that (x) such Indebtedness, Disqualified Stock or Preferred Stock complies with the Required Additional Debt Terms and (y) any incurrence of Indebtedness or issuance of Disqualified Stock or Preferred Stock by any Restricted Subsidiary that is not a Subsidiary Guarantor pursuant to this clause (a) shall be subject to the limitations set forth in Section 6.01(g).
(b) The provisions limitations set forth in clause (a) of this Section 4.09(a) hereof 6.01 shall not apply toto any of the following items:
(i) Indebtedness under any Receivables Facility; provided that any Indebtedness incurred under this subclause (i) shall reduce (for so long as, and to the extent that, the Indebtedness referred to in this subclause (i) remains outstanding) dollar-for-dollar the aggregate amount of Indebtedness permitted to be incurred under Section 6.01(b)(iii)(y);
(ii) Indebtedness of the Borrower and any of its Restricted Subsidiaries under the Loan Documents;
(iii) Indebtedness under the ABL Credit Agreement, when aggregated with the then outstanding amount of Indebtedness under subclause 6.01(b)(xv) incurred to refinance Indebtedness permitted by this subclause (iii), in an amount not to exceed the greater of (x) $500.0 million and (y) the Borrowing Base (as defined in the ABL Credit Agreement as in effect on the date hereof); provided that (1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under to be incurred pursuant to this clause subclause (1iii)(y) or any portion thereof, shall be reduced dollar-for-dollar by the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee of the Notes;
(3) Indebtedness of the Company, the Issuer and their Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1then outstanding under Section 6.01(b)(i) and (2) of this Section 4.09(b))no Domestic Subsidiary other than a Loan Party shall at any time be an obligor under such Indebtedness;
(4iv) Indebtedness arising under (x) the 2021 Senior Notes in an aggregate principal amount, when aggregated with the then outstanding amount of Indebtedness under subclause (b)(xv) incurred to refinance Indebtedness permitted by this subclause (b)(iv)(x), not to exceed $845.0 million and (y) the 2020 Senior Notes in an aggregate principal amount, when aggregated with the then outstanding amount of Indebtedness under subclause (b)(xv) below incurred to refinance Indebtedness permitted by this subclause (b)(iv)(y), in an aggregate principal amount not to exceed $400.0 million, provided that if the aggregate principal amount of the Repurchased Notes accepted for repurchase in the Tender Offer is less than $400.0 million, the aggregate principal amount of the 2020 Senior Notes permitted by this subclause (b)(iv)(y) shall be increased by the aggregate principal amount of the Redeemed Notes called for redemption through the irrevocable notice delivered on the Closing Date under Section 4.01(j) until such Redeemed Notes are redeemed; provided, further, that, in each case, no Person other than a Loan Party shall at any time be an obligor under such Indebtedness;
(v) Indebtedness (other than Indebtedness under the ABL Credit Agreement, the 2020 Senior Notes and the 2021 Senior Notes) existing on the Closing Date; provided that any Indebtedness which is in excess of (x) $5.0 million individually or (y) $25.0 million in the aggregate (when taken together with all other Indebtedness outstanding in reliance on this subclause (b)(v) that is not set forth on Schedule 6.01)) shall only be permitted under this subclause (b)(v) to the extent such Indebtedness is set forth on Schedule 6.01;
(vi) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Company Borrower or any of its the Restricted Subsidiaries, Subsidiaries to finance the development, construction, purchase, lease (other than the lease, pursuant to Sale and Lease-Back Transactions, of property (real or personal), equipment or other fixed or capital assets owned by the Borrower or any Restricted Subsidiary as of the Closing Date or acquired by the Borrower or any Restricted Subsidiary after the Closing Date in exchange for, or with the proceeds of the sale of, such assets owned by the Borrower or any Restricted Subsidiary as of the Closing Date), repairs, additions or improvement of property (real or personal) ), equipment or equipment other fixed or capital assets; provided that is used at the time of incurrence of such Indebtedness or useful in a Similar Businessissuance of such Disqualified Stock or Preferred Stock, whether through the direct purchase aggregate amount of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other outstanding Indebtedness, Disqualified Stock and/or and Preferred Stock issued and outstanding under permitted by this clause subclause (4b)(vi), when aggregated with the then outstanding amount of Indebtedness under subclause (b)(xv) below incurred to refinance Indebtedness permitted by this subclause (b)(vi), in an amount not to exceed 4.0the greater of (A) $150.0 million and (B) 35% of Total Assets at EBITDA of the Borrower for the most recently ended Test Period as of the time any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterincurred;
(5vii) Indebtedness incurred by the Company Borrower or any of its Restricted Subsidiaries Subsidiary constituting reimbursement obligations with respect to letters of credit or surety bonds issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; providedprovided that, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 thirty (30) days following such drawing or incurrence;
(6viii) Indebtedness arising from agreements of the Company Borrower or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
provided that (A) such Indebtedness is not reflected on the balance sheet of the Company Borrower or any of its Restricted Subsidiaries Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will shall not be deemed to be reflected on such balance sheet for purposes of this clause subclause (6A)) (a)); and
and (B) the maximum assumable liability in respect of all such Indebtedness (other than for those indemnification obligations that are not customarily subject to a cap) shall at no time exceed the gross proceeds including non-cash noncash proceeds (the fair market value of such non-cash noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company Borrower and its the Restricted Subsidiaries in connection with such disposition;
(7ix) Indebtedness of the Company Borrower owing to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor (other than the Issuer) is expressly unsecured and subordinated in right of payment to the NotesObligations; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this subclause (b)(ix);
(x) Indebtedness of a Restricted Subsidiary owing to the Borrower or another Restricted Subsidiary; provided that (A) if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Subsidiary Guarantor, such Indebtedness is unsecured and subordinated in right of payment to the obligations of such Subsidiary Guarantor under its Loan Guaranty and (B) any Indebtedness of a Restricted Subsidiary that is not a Loan Party owing to a Loan Party was made by such Loan Party in compliance with Section 6.07; provided, further, that any subsequent issuance or transfer of Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this subclause (b)(x);
(xi) subject to compliance with Section 6.07, shares of Preferred Stock of a Restricted Subsidiary issued to the Borrower or another Restricted Subsidiary; provided that any subsequent issuance or transfer of Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Preferred Stock (except to the Company Borrower or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred StockStock not permitted by this subclause (b)(xi);
(10xii) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting limiting: (A) interest rate risk with respect to any Indebtedness that is permitted under this Agreement to be incurred pursuant to this Section 4.09outstanding, (B) exchange rate risk or (C) commodity pricing risk;
(11xiii) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company Borrower or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12A) (a) subject to compliance with Section 6.07, any guarantee by the Borrower or a Restricted Subsidiary of Indebtedness or Disqualified Stock other obligations of any Restricted Subsidiary, so long as, in the case of any guarantee of Indebtedness, the incurrence of such Indebtedness is permitted under the terms of this Agreement or (B) any guarantee by a Restricted Subsidiary of Indebtedness of the Company Borrower is permitted to be incurred under the terms of this Agreement; provided, in each case, that in the case of any guarantee of Indebtedness of the Borrower or any Subsidiary Guarantor by any Restricted Subsidiary that is not a Subsidiary Guarantor, such Restricted Subsidiary executes a Joinder Agreement in order to become a Subsidiary Guarantor under this Agreement and otherwise complies with Section 5.11 as if such Restricted Subsidiary is a newly acquired or formed Domestic Subsidiary; provided further, that no Restricted Subsidiary that is a Foreign Subsidiary shall become a Subsidiary Guarantor without the consent of the Agent;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of the Company Borrower or any Restricted Subsidiary equal that serves to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue extend, replace, refund, refinance, renew or sale of Equity Interests of the Company or defease any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock Person incurred as permitted under Section 4.09(a) hereof and clauses clause (2), (3), (4) and (12)(aa) of this Section 4.09(b6.01 and subclauses (b)(iii), this clause (13iv), (v) and clause (14vi) of above, this Section 4.09(bsubclause (b)(xv) or any Indebtednessand subclauses (b)(xvi), Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness(b)(xvii) and (b)(xx)(B) below, Disqualified Stock or Preferred Stock including and additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums and fees (including reasonable tender lender premiums), defeasance costs and fees ) in connection therewith (the collectively, “Refinancing Indebtedness”) prior to its respective maturity); provided, that such Refinancing Indebtednesshowever, that:
(A) such Refinancing Indebtedness has a (1) Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded extended, replaced, refunded, refinanced, renewed or defeased and (2) maturity date that is no shorter than the maturity date of the Indebtedness, Disqualified Stock or Preferred Stock being extended, replaced, refunded, refinanced, renewed or defeased,
(B) to the extent such Refinancing Indebtedness refinances extends, replaces, refunds, refinances, renews or defeases (i1) Indebtedness subordinated or pari passu to the Notes Obligations or the Loan Guaranty of any Guarantee thereofSubsidiary Guarantor, such Refinancing Indebtedness is subordinated or pari passu to the Notes Obligations or the Guarantee such Loan Guaranty at least to the same extent as the Indebtedness being refinanced extended, replaced, refunded, refinanced, renewed or refunded defeased or (ii2) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
include (D) shall not include:
(i1) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company that is not a Subsidiary Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
Borrower, (ii2) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company that is not a Subsidiary Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary Guarantor or the Issuer; or
(iii3) Indebtedness, Disqualified Stock or Preferred Stock of the Company Borrower or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary,
(D) such Refinancing Indebtedness shall be in an aggregate principal amount (or accreted value, if applicable) that does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness, Disqualified Stock or Preferred Stock so modified, refinanced, refunded, renewed or extended except by an amount equal to unpaid accrued interest and premium thereon plus other reasonable amounts paid, and fees and expenses reasonably incurred, in connection with such extension, replacement, refunding, refinancing, renewal or defeasance,
(E) if such Indebtedness, Disqualified Stock or Preferred Stock being so extended, replaced, refunded, refinanced, renewed or defeased is secured by a Lien on the Collateral, the Lien securing such Refinancing Indebtedness shall not be senior in priority to the Lien on the Collateral securing the Indebtedness, Disqualified Stock or Preferred Stock being so extended, replaced, refunded, refinanced, renewed or defeased unless otherwise permitted under this Agreement and any such Liens shall be subject to a First Lien Intercreditor Agreement or Junior Lien Intercreditor Agreement, as applicable,
(F) the terms and conditions (including, if applicable, as to collateral but excluding as to subordination, interest rate and redemption premium) of any such Refinancing Indebtedness, taken as a whole, are not materially less favorable to the lenders of such Refinancing Indebtedness than the terms and conditions of the Indebtedness, Disqualified Stock or Preferred Stock being extended, replaced, refunded, refinanced, renewed or defeased, and
(G) to the extent such Indebtedness, Disqualified Stock or Preferred Stock being extended, replaced, refunded, refinanced, renewed or defeased is unsecured, such Refinancing Indebtedness is unsecured; provided, further, that any incurrence of Indebtedness or issuance of Disqualified Stock or Preferred Stock by any Restricted Subsidiary that is not a Subsidiary Guarantor pursuant to this subclause (b)(xv) shall be subject to the limitations set forth in Section 6.01(g) to the same extent as the Indebtedness refinanced;
(14xvi) Indebtedness, Disqualified Stock or Preferred Stock of (x) of the Company or, subject to Section 4.09 (c) hereof, a Borrower or any Restricted Subsidiary incurred to finance an acquisition any Investment permitted by subclause (c)(i)(A) or (B) or (c)(iii) of the definition of “Permitted Investments” or (y) of Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, ort
Appears in 1 contract
Sources: Credit Agreement (Clean Harbors Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise liable for (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Consolidated Net Leverage Ratio on a consolidated basis for at the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which time such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 no greater than 4.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom); provided further, as if the additional however, that Restricted Subsidiaries that are not Guarantors may not incur Indebtedness had been incurred, or the issue Disqualified Stock or Preferred Stock had been issuedif, as the case may beafter giving pro forma effect to such incurrence or issuance, and the application more than an aggregate of proceeds therefrom had occurred $300,000,000 at the beginning time of incurrence of such four-quarter periodIndebtedness or Disqualified Stock or Preferred Stock of such Restricted Subsidiaries that are not Guarantors is outstanding pursuant to this Section 4.09(a) and clause (17) of Section 4.09(b).
(b) The provisions of Section 4.09(a) hereof shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof); provided, and however, that immediately after giving effect to any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtednessincurrence, up to an the then outstanding aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any all Indebtedness permitted under this clause (1) or does not exceed at any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingone time $2,400,000,000;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Guarantee) (other than any Additional NotesNotes or Guarantees with respect thereto), including any Guarantee of the Notes;
(3) Indebtedness of the Company, the Issuer and their its Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4A) Indebtedness (including Capitalized Lease ObligationsObligations and Attributable Debt), Disqualified Stock and Preferred Stock incurred by the Company Issuer or any of its Restricted Subsidiaries, Subsidiaries to finance the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Businessequipment, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets, and any Indebtedness incurred to Refinance any such Indebtedness (and successive Refinancings thereof), in an aggregate principal amountamount or liquidation preference which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued and then outstanding under this clause (4)(A), together with the aggregate principal amount of Indebtedness outstanding pursuant to clause (B) of this clause (4), does not to exceed 4.0the greater of (x) $150,000,000 and (y) 25% of Total Assets at any time outstanding; so long as such Indebtedness exists Four Quarter EBITDA at the date time of such purchase, lease incurrence and (B) any Indebtedness incurred to Refinance Indebtedness incurred under clause (A) of this clause (4) (or improvement or is created within 270 days thereaftersuccessive Refinancings of Indebtedness incurred under this clause (B));
(5) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar facilities issued or entered into in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, performance or surety bonds, health, disability or other employee benefits, property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit performance or the incurrence of such Indebtednesssurety bonds, such obligations are reimbursed within 30 days following such drawing health, disability or incurrenceother employee benefits, or property, casualty or liability insurance or self-insurance;
(6) Indebtedness arising from agreements of the Company Issuer or its Restricted Subsidiaries providing for indemnification, earn-out, holdback, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company Issuer to a Restricted Subsidiary or a Restricted Subsidiary to the Issuer or another Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than such as may arise from ordinary course intercompany cash management obligations) owing by the Issuer) Issuer or a Guarantor to a Non-Guarantor Subsidiary is expressly subordinated in right of payment to the NotesNotes or the applicable Guarantee, as applicable; and provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in such Preferred Stock being beneficially owned by a Person other than the Issuer or any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred StockStock not permitted by this clause (8);
(9) Hedging Obligations not entered into for speculative purposes;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of workers’ compensation claims, self-insurance, performance, bid, appeal and surety bonds and performance or completion guarantees and similar obligations provided by the Company Issuer or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bankers’ acceptances, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business;
(12) (aA) Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary Guarantor not otherwise permitted hereunder under this Indenture in an aggregate principal amount or liquidation preference, which when aggregated with the outstanding principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b11)(A), together with the aggregate principal amount of Indebtedness outstanding pursuant to clause (B) of this clause (11), does not exceed the greater of (x) $200,000,000 and (y) 33% of Four Quarter EBITDA at the time of incurrence and (B) any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock Indebtedness incurred pursuant to this Refinance Indebtedness incurred under clause (12A) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b11) but shall be deemed (or successive Refinancings of Indebtedness incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(bB));
(1312) the incurrence by the Company Issuer or any Restricted Subsidiary, Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which Refinancing Indebtedness that serves to refund or refinance Refinance:
(A) any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), ) and/or (4) and (12)(a13) of this Section 4.09(b), this clause or
(13B) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued incurred to so refund or refinance such Refinance the Indebtedness, Disqualified Stock or Preferred Stock including described in clause (A) of this Section 4.09(b)(12), including, in each case, additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), accrued interest, defeasance costs and reasonable fees and expenses in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuertherewith;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(1413) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, Issuer or a Restricted Subsidiary incurred to finance an acquisition of any assets, business or Person or (y) Persons that are acquired by the Company Issuer or any Restricted Subsidiary or merged into or amalgamated into consolidated with the Company Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that that, after giving effect to such acquisition, merger or amalgamation consolidation, either:
(A) the Company Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Consolidated Net Leverage Ratio test set forth in Section 4.09(a) hereof), or
(B) the Fixed Charge Coverage Consolidated Net Leverage Ratio of the Company and the Restricted Subsidiaries is less than or equal to or greater than the Consolidated Net Leverage Ratio immediately prior to such acquisition, merger or amalgamationconsolidation;
(1514) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business or other cash management services in the ordinary course of business, ; provided that such Indebtedness is extinguished within five ten Business Days of notice of its incurrence;
(1615) Indebtedness of the Company Issuer or any of its Restricted Subsidiaries supported by a letter of credit or bank guarantee issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of creditcredit or bank guarantee;
(17) (A) any guarantee by the Company Issuer or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture,
(B) any guarantee by a Restricted Subsidiary of Indebtedness of the Issuer; provided that such guarantee is incurred in accordance with Section 4.14, or
(C) any guarantee by the Issuer or a Restricted Subsidiary in the ordinary course of business in respect of obligations to suppliers, customers, franchisees, lessors and licensees of the Issuer or any Restricted Subsidiary;
(17) (A) Indebtedness of Non-Guarantor Subsidiaries in an aggregate principal amount, which when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (17)(A) and incurred by Non-Guarantor Subsidiaries pursuant to Section 4.09(a), together with the aggregate principal amount of Indebtedness outstanding pursuant to clause (B) of this clause (17), does not exceed the greater of (x) $300,000,000 and (y) 50% of Four Quarter EBITDA at the time of incurrence and (B) any Indebtedness incurred to Refinance Indebtedness incurred under clause (A) of this clause (17) (or successive Refinancings of Indebtedness incurred under this clause (B));
(18) Indebtedness of the Issuer or any of its Restricted Subsidiaries consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangements in each case, incurred in the ordinary course of business;
(19) Indebtedness of the Issuer or any of its Restricted Subsidiaries undertaken in connection with cash management, overdraft protection and related activities with respect to any Subsidiary or joint venture in the ordinary course of business; and
(20) Indebtedness consisting of Indebtedness issued by the Issuer or any of its Restricted Subsidiaries to current or former officers, directors and employees thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Issuer to the extent permitted under Section 4.07(b)(4).
(c) For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (1) through (20) of Section 4.09(b) or is permitted to be incurred pursuant to Section 4.09(a), the Issuer, in its sole discretion, may divide and/or classify on the date of incurrence such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) in any manner that complies with this Section 4.09 and may later redivide and/or reclassify (based on circumstances existing at the time of such redivision or reclassification) such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) in any manner that complies with this Section 4.09; provided that all Indebtedness outstanding under the Senior Credit Facilities on the Distribution Date will be treated as incurred on the Distribution Date under clause (1) of Section 4.09(b) and will not later be reclassified.
(d) Accrual of interest or dividends, the accretion of accreted value and the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends in the form of additional shares of Disqualified Stock or Preferred Stock, as applicable, of the same class, and accretion of original issue discount or liquidation preference will not be deemed to be an incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 4.09. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.09.
(e) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed or first incurred (whichever is lower), in the case of revolving credit debt; provided that if such Indebtedness is incurred to Refinance other Indebtedness denominated in a foreign currency, and such Refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such Refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such Indebtedness does not exceed the principal amount of such Indebtedness being Refinanced. For the avoidance of doubt and notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that may be incurred pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies.
(f) The principal amount of any Indebtedness incurred to Refinance other Indebtedness, if incurred in a different currency from the Indebtedness being Refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated as in effect on the date of such Refinancing.
(g) The Issuer shall not, and shall not permit any Guarantor to, directly or indirectly, incur Indebtedness (including Acquired Indebtedness) that is contractually subordinated in right of payment to any Indebtedness of the Issuer or such Guarantor, as the case may be, unless such Indebtedness is contractually subordinated in right of payment to the Notes or such Guarantor’s Guarantee, in all material respects, to the extent and in the manner as such Indebtedness is so subordinated to other Indebtedness of the Issuer or such Guarantor, as the case may be.
Appears in 1 contract
Sources: Indenture (Time Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company (i) MPM shall not, and shall not permit any of its the Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) MPM shall not permit any of the Restricted Subsidiary Subsidiaries (other than a Note Guarantor) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company MPM and any Restricted Subsidiary may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of MPM for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by MPM or the Restricted Subsidiaries of Indebtedness (including under any Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), ) and any Refinancing Indebtedness in respect thereof represented by the Notes and Guarantees in respect of such Indebtedness, the Note Guarantees) up to an aggregate principal amount outstanding at any one time, when taken together with of:
(1) the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, sum of (ix) $5,250.0 million, plus 300 million and (ii) €750.0 million, plus (iiiy) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereofan ABL Facility, the aggregate amount by which the Borrowing Base (calculated on a pro forma basis) exceeds $300 million at the time of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;incurrence; plus
(2) the incurrence by sum of (x) $1,200 million and (y) an aggregate additional principal amount of Consolidated Total Indebtedness constituting First Priority Lien Obligations outstanding at any one time that does not cause the Issuer and any Guarantor Consolidated Secured Debt Ratio of Indebtedness represented by the Notes MPM to exceed 3.75 to 1.00, determined on a pro forma basis (not including any Additional Notes), including any Guarantee a pro forma application of the Notesnet proceeds therefrom);
(3ii) [Reserved];
(iii) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b)), including the Existing Notes and the guarantees thereof;
(4iv) (a) Indebtedness (including Capitalized Lease Obligations)) Incurred by MPM or any of the Restricted Subsidiaries, Disqualified Stock issued by MPM or any of the Restricted Subsidiaries and Preferred Stock incurred issued by the Company or any of its Restricted Subsidiaries, Subsidiaries to finance (whether prior to or within 270 days after) the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) and (b) Acquired Indebtedness; in an aggregate principal amountamount that, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued and then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed 4.0the greater of $150.0 million and 5.0% of Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company MPM or any of its the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company MPM or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the any acquisition or disposition of any business, assets or a SubsidiarySubsidiary of MPM in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company MPM to a Restricted Subsidiary; provided that any such Indebtedness owing owed to a Restricted Subsidiary that is not a Note Guarantor (other than the Issuer) is expressly subordinated in right of payment to the obligations of MPM under the Notes; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company MPM or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence Incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company MPM or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company MPM or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to MPM or another Restricted Subsidiary; provided that if a Note Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is not a Note Guarantor, such Indebtedness is subordinated in right of payment to the Note Guarantee of such Note Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to MPM or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into that are not Incurred for speculative purposespurposes and are either: (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases or sales;
(11xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds, including surety bonds issued in respect of workers’ compensation claims, and completion guarantees provided by MPM or any Restricted Subsidiary in the Company ordinary course of business or consistent with past practice or industry practice;
(xii) Indebtedness or Disqualified Stock of MPM or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, as applicable, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed the greater of $150.0 million and 5.0% of Total Assets at the time of Incurrence (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a) from and after the first date on which MPM, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii));
(xiii) any guarantee by MPM or any of its Restricted Subsidiaries of Indebtedness or other obligations of MPM or any of the Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by MPM or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the ordinary course Notes or the Note Guarantee of businesssuch Restricted Subsidiary, as applicable, any such guarantee of such Note Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Note Guarantor’s Note Guarantee with respect to the Notes substantially to the same extent as such Indebtedness is subordinated to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable;
(12xiv) the Incurrence by MPM or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary that serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(a) and clauses (ii), (iii), (iv), (xiv), (xv), and/or (xx) of this Section 4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including, in each case, any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums), expenses, defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”); provided, however, that such Refinancing Indebtedness:
(1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date one year following the maturity date of any Notes then outstanding were instead due on such date one year following the maturity date of such Notes;
(2) has a Stated Maturity which is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or defeased or (y) 91 days following the maturity date of the Notes;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;
(4) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Company Indebtedness being refinanced plus premium, expenses, costs and fees Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary that is not a Note Guarantor that refinances Indebtedness of MPM or a Restricted Subsidiary that is a Note Guarantor (unless such Restricted Subsidiary is an obligor with respect to such Indebtedness being refinanced), or (y) Indebtedness of MPM or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(6) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xx) of this Section 4.03(b); provided, further, that subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of (A) the Notes and (B) any Indebtedness constituting First Priority Lien Obligations.
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (x) MPM or any of the Company Restricted Subsidiaries Incurred to finance an acquisition or (y) Persons that are acquired by MPM or any of the Restricted Subsidiaries or merged or amalgamated with or into MPM or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving effect to such acquisition, merger or amalgamation and the Incurrence of such Indebtedness either:
(1) MPM would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of Section 4.03(a); or
(2) the Fixed Charge Coverage Ratio would be equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to MPM or any Restricted Subsidiary equal other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five Business Days of its Incurrence;
(xviii) Indebtedness of MPM or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to 200.0any Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Indebtedness or Disqualified Stock of MPM or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference not exceeding at any time outstanding 200% of the net cash proceeds received by MPM and the Company Restricted Subsidiaries since immediately after the Transaction Issue Date from the issue or sale of Equity Interests of the Company MPM or any of its direct or indirect parent companies entity of MPM (which proceeds are contributed to MPM or a Restricted Subsidiary) or cash contributed to the capital of the Company MPM (in each case, case other than proceeds of Disqualified Stock or sales of Equity Interests to the Company to, or contributions received from, MPM or any of its Subsidiaries) ), as determined in accordance with clauses (3)(BB) and (3)(CC) of Section 4.07(a) hereof the definition of Cumulative Credit, to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b4.04(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and );
(bxx) Indebtedness of Foreign Subsidiaries for working capital purposes or Disqualified Stock any other purposes; provided, however, that the aggregate principal amount of the Company and IndebtednessIndebtedness Incurred under this clause (xx), Disqualified Stock or Preferred Stock of the Company or, subject other than for working capital purposes (up to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferenceoutstanding not to exceed $100,000,000), which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock Indebtedness then outstanding and incurred Incurred pursuant to this clause (12)(bxx), does not exceed the greater of $150.0 million and 5.0% of Total Assets at any one the time outstanding exceed $900.0 million of Incurrence (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Indebtedness Incurred under this clause (12) (bxx) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxx) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which the Company or such Restricted Foreign Subsidiary could have incurred Incurred such Indebtedness, Disqualified Stock or Preferred Stock Indebtedness under Section 4.09 (a) hereof 4.03(a), and the other provisions of this Indenture, without reliance on upon this clause (12)(bxx));
(13xxi) the incurrence by the Company Indebtedness of MPM or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock consisting of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition financing of insurance premiums or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, take-or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or-pay ob
Appears in 1 contract
Sources: Indenture (Momentive Performance Materials Quartz, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectivelyeach instance thereof, an “incurrence”) ), with respect to any Indebtedness (including Acquired Indebtedness) ), and the Company will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis Pro Forma Basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof shall not apply toprohibit the incurrence of any of the following items of Indebtedness:
(1) (a) the incurrence of Indebtedness under pursuant to Credit Facilities by the Company, the Issuer Company or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding of all Indebtedness incurred under this Section 4.09(b)(1) at any one time, when taken together with time outstanding not to exceed the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, sum of (i) $5,250.0 million, plus 635.0 million and (ii) €750.0 millionthe greater of (A) $150.0 million and (B) 75.0% of LTM EBITDA; and (b) Indebtedness incurred to refund or refinance Indebtedness incurred pursuant to clause (1)(a) or this clause (1)(b), plus Refinancing Expenses (iii) in the case of any refinancing of any Indebtedness permitted it being understood that amounts outstanding under this clause (1b) or any portion thereof, shall reduce the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingavailability (but not below zero) under the foregoing clause (a));
(2) the incurrence by the Issuer Company and any Subsidiary Guarantor of Indebtedness represented by under the Notes (not including Guarantees thereof) (other than any Additional Notes), including any Guarantee of the Notes;
(3) Indebtedness and Disqualified Stock of the Company, the Issuer Company and their its Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses contemplated by clause (1) and or (2) of this Section 4.09(b))) of this Indenture) outstanding on the Issue Date;
(4) Indebtedness (including Capitalized Lease Obligations), ) and Disqualified Stock and Preferred Stock incurred or issued by the Company or any of its Restricted Subsidiaries, and the issuance of Preferred Stock by any Restricted Subsidiary of the Company, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Businessequipment, whether through the direct purchase of assets or the purchase of Capital Stock of any Person owning such assets assets, in an aggregate principal amount, when taken together with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or Preferred Stock issued Indebtedness incurred pursuant to this Section 4.09(b)(4) and then outstanding under this clause (4)at the date of such incurrence, not to exceed 4.0the greater of (x) $80.0 million and (y) 40.0% of Total Assets at any time outstandingLTM EBITDA; so long as provided, however, that such Indebtedness exists at the date of such purchase, lease purchase or improvement transaction or is created within 270 365 days thereafterthereafter (for the avoidance of doubt, the purchase date for any asset shall be the later of the date of completion of installation and the beginning of the full productive use of such asset);
(5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, death, disability or other employee benefits or property, casualty or liability insurance, or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, including earnouts, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor (other than the Issuer) is expressly shall be subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any the Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)Subsidiary Guarantor, such Indebtedness is expressly shall be subordinated in right of payment to the Guarantee of the Notes of such Subsidiary Guarantor; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed in each case to be an issuance of such shares of Preferred StockStock not permitted by this clause (9);
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness of the Company or any Restricted Subsidiary permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal appeal, stay, surety, customs and surety replevin bonds and performance and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencepreference that, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b12), does not at any one time outstanding exceed the greater of (x) $900.0 100.0 million and (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12y) (b) shall cease to be deemed incurred or outstanding for purposes 50.0% of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b))LTM EBITDA;
(13) the incurrence or issuance by the Company or any Restricted SubsidiarySubsidiary of Indebtedness or Disqualified Stock, and the issuance by any Restricted Subsidiary of IndebtednessPreferred Stock, in each case that serves to refund, refinance, replace, renew, extend or defease any Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary or Preferred Stock which serves to refund of any Restricted Subsidiary incurred or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred issued as permitted under Section 4.09(a) hereof and clauses the first paragraph of this covenant or clause (2), (3), (4) and or (12)(a12) of this Section 4.09(b)above, this clause (13) and or clause (14) of this Section 4.09(bor (23) below or any Indebtedness, Disqualified Stock or Preferred Stock previously incurred or issued to so refund refund, refinance, replace, renew, extend or refinance defease such Indebtedness or Disqualified Stock or Preferred Stock (provided that any amounts incurred under this clause (13) as Refinancing Indebtedness in respect of Indebtedness, Disqualified Stock or Preferred Stock including incurred or issued under or in respect of Refinancing Indebtedness previously incurred in respect of Indebtedness, Disqualified Stock or Preferred Stock incurred or issued under clause (4), (12) or (23) shall reduce the amount available under such clause so long as such Refinancing Indebtedness remains outstanding), including, in each case, such additional Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to pay premiums (including reasonable tender premiums), defeasance costs and fees Refinancing Expenses in connection therewith (the “Refinancing Indebtedness”) ), prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(Aa) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which that is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock being refunded refunded, refinanced, replaced, renewed, extended or refinanced,defeased (or requires no or nominal payments in cash prior to the date that is 91 days after the maturity date of the Notes);
(Bb) to the extent such Refinancing Indebtedness refinances it refunds, refinances, replaces, renews, extends or defeases (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereofSubordinated Indebtedness, such Refinancing Indebtedness is subordinated or pari passu in right of payment to the Notes or the Guarantee thereof at least to the same extent as the Indebtedness being refinanced refunded, refinanced, replaced, renewed, extended or refunded defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(Dc) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the IssuerCompany;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the IssuerSubsidiary Guarantor; or
(iii) Indebtedness or Disqualified Stock of the Company or Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
; and, provided further, that subclause (14a) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect clause (13) will not apply to such acquisitionany refunding, merger refinancing, replacement, renewal, extension or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations defeasance of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orSecured Indebtedness;
Appears in 1 contract
Sources: Indenture (Glatfelter Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall Prior to the Effective Date, the Escrow Issuer will not, and shall Intermediate Holdings will not permit the Company or any of its Restricted Subsidiaries to, and from and after the Effective Date, the Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock and the Company will not permit any of its Restricted Subsidiary Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and any Restricted Subsidiary may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of the Company for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided that the amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Subsidiary Guarantors shall not exceed $50.0 million at any one time outstanding.
(b) The provisions of Section 4.09(a) hereof shall foregoing limitations will not apply to:to (each of the items below, the “Permitted Debt”):
(1) the incurrence Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under any Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount then outstanding at any one time, when taken together with equal to the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (i) the sum of (x) $5,250.0 million, plus 137.5 million and (y) the U.S. dollar equivalent of €50 million and (ii) €750.0 millionthe sum of (x) 65% of the net book value of the inventory (determined on a LIFO basis) of the Company and its Restricted Subsidiaries and (y) 80% of the net book value of the accounts receivable of the Company and its Restricted Subsidiaries (in each case, plus (iii) determined by the net book value set forth on the consolidated balance sheet of the Company for the fiscal quarter immediately preceding the date on which such Indebtedness is Incurred for which internal financial statements are available, giving pro forma effect, determined in good faith by a responsible financial officer of the case Company, to any acquisitions or dispositions that have occurred or are expected to occur at or prior to the date of any refinancing incurrence of any such Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with following such refinancingbalance sheet date);
(2) the incurrence Incurrence by the Issuer and any Guarantor the Subsidiary Guarantors of Indebtedness represented by the Notes (not including any Additional Notes)) and the related Guarantees, including any Guarantee of the Notesas applicable;
(3) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or the Merger Date (other than Indebtedness of the Subsidiary Guarantors being repaid in the Transactions and Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock Obligations and Preferred Stock incurred Indebtedness in connection with a Sale/Leaseback Transaction) Incurred by the Company or any of its Restricted Subsidiaries, Subsidiaries to finance the purchase, lease lease, construction, repair, addition or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) which incurrence occurs within 365 days of such purchase, lease, construction, repair, addition or improvement in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and Indebtedness then outstanding that was Incurred (or deemed Incurred as provided under clause (14) below) pursuant to this clause (4), does not to exceed 4.0the greater of (x) 3.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterand (y) $25.0 million;
(5) Indebtedness incurred Incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtednesscredit, such obligations are reimbursed within 30 45 days following such drawing or incurrencedrawing;
(6) Indebtedness arising from agreements of the Company or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the acquisition or disposition of any business, assets or a SubsidiarySubsidiary of the Company in accordance with the terms of the Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that
(A) , at the time of closing, the amount of such Indebtedness is not reflected on determinable and, to the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all extent such Indebtedness shall at no time exceed thereafter becomes fixed and determined, the gross 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 by the Company and its Restricted Subsidiaries in connection with such dispositionIndebtedness is paid within 60 days thereafter;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided provided, however, that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notesobligations of the Company under the Notes and the Indenture; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedfurther, in each casehowever, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Restricted Subsidiary) shall be deemed, in each case to be an Incurrence of such Indebtedness;
(8) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided, however, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(9) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided, however, (i) any such Indebtedness is made pursuant to an inter-company note and (ii) that if a Subsidiary Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further, however, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(10) Hedging Obligations (excluding Hedging Obligations entered into that are not Incurred for speculative purposespurposes and are (i) for the purpose of limiting managing exposure to interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be incurred pursuant outstanding; (ii) for the purpose of managing exposure to this Section 4.09, currency exchange rate risk with respect to any currency exchanges; or (iii) for the purpose of managing exposure to commodity pricing riskprice risk with respect to any metal, fuel or other commodity purchases or sales;
(11) obligations in respect of performance, bid, appeal and surety bonds, including surety bonds issued in respect of workers’ compensation claims, and completion guarantees provided by the Company or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary Guarantor not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, as applicable, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred pursuant to this clause (12) (b) shall cease to be or deemed incurred or outstanding for purposes of this Incurred as provided under clause (12)(b14) but shall be deemed incurred for below), does not exceed the purposes greater of Section 4.09(a(x) hereof from 1.0% of Total Assets and after (y) $10.0 million;
(13) any guarantee by the first date on which Company or any of its Restricted Subsidiaries of Indebtedness or other obligations of the Company or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness or other obligations Incurred by the Company or such Restricted Subsidiary could have incurred is permitted under the terms of the Indenture; provided, however, that if such IndebtednessIndebtedness is by its express terms subordinated in right of payment to the Notes or the Guarantee of such Restricted Subsidiary, Disqualified Stock as applicable, any such guarantee of any Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantor’s Guarantee with respect to the Notes substantially to the same extent as such Indebtedness is subordinated to the Notes or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b))the Guarantee of such Guarantor, as applicable;
(1314) the incurrence Incurrence by the Company or any of its Restricted Subsidiary, Subsidiaries of Indebtedness, Disqualified Stock or Preferred Stock Indebtedness which serves to refund refund, refinance or refinance defease any Indebtedness, Disqualified Stock Indebtedness Incurred under the first paragraph of this covenant or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses clause (2), (3), (4), (12), (14), (15) and or (12)(a18) of this Section 4.09(b)paragraph (subject to the following proviso, this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity); provided, however, that such Refinancing Indebtedness:
(Ai) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock Indebtedness being refunded or refinanced,refinanced and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness being refunded or refinanced that were due on or after the date one year following the last maturity date of any Notes then outstanding were instead due on such date one year following;
(Bii) has a Stated Maturity which is no earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or (y) one year following the last maturity date of any Notes then outstanding;
(iii) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu junior in right of payment to the Notes or the Guarantee at least of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior in right of payment to the same extent Notes or the Guarantee of such Restricted Subsidiary, as applicable;
(iv) is Incurred in an aggregate principal amount (or if issued with significant original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with significant original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stockplus premium, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be accrued and unpaid interest thereon and fees and expenses required to be incurred substantially contemporaneously paid in connection with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, andrefinancing;
(Dv) shall not include:
include (ix) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of a Restricted Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuerunless such Restricted Subsidiary is an obligor with respect to such Indebtedness being refinanced), or (y) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of an Unrestricted Subsidiary; and
(vi) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (4), (12) or (18), shall be deemed to have been Incurred and to be outstanding under such clause (4), (12) or (18), as applicable, and not this clause (14) for purposes of determining amounts outstanding under such clause (4), (12) or (18), as applicable; provided further, however, that subclauses (i), (ii) and (iii) of this clause (14) will not apply to any Refinancing Indebtedness Incurred to refund, refinance or defease the Notes;
(1415) Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of (x) of the Company or, subject to Section 4.09 (c) hereof, a Restricted or any Subsidiary Guarantor incurred to finance an or assumed in connection with the acquisition of any Person or assets (other than the Acquisition) or (y) of Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenturethe Indenture (other than the Acquisition); provided provided, however, that after giving effect to such acquisitionacquisition or merger, merger or amalgamation either:
(Ai) the Company would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, the first paragraph of this covenant; or
(Bii) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries on a consolidated basis is equal to or greater than immediately prior to such acquisition, merger acquisition or amalgamationmerger;
(1516) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, provided however, that such Indebtedness is extinguished within five Business Days of its incurrenceIncurrence;
(1617) Indebtedness of the Company or any Restricted Subsidiary consisting of its (x) the financing of insurance premiums, (y) take or pay obligations contained in supply arrangements, in each case, entered into in the ordinary course of business or (z) to the extent constituting Indebtedness, obligations under a Permitted Supplier Financing Arrangement; and
(18) Indebtedness or Disqualified Stock of a Restricted Subsidiaries supported Subsidiary incurred to finance or assumed in connection with an acquisition, which, when aggregated with the principal amount of all other Indebtedness and Disqualified Stock incurred pursuant to this clause (18) then outstanding (including any such Refinancing Indebtedness) does not exceed $10.0 million.
(c) Any Indebtedness incurred under a revolving Credit Agreement, including under the North America ABL Facility or the German Factoring Facility, pursuant to clause (a) of the second paragraph of this covenant shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid in a manner which results in the permanent reduction in the applicable commitments other than pursuant to a refinancing permitted under the Intercreditor Agreement.
(d) Notwithstanding the foregoing, the Company and the Guarantors may not Incur any Indebtedness pursuant to paragraph (b) above if the proceeds thereof are used, directly or indirectly, to repay, prepay, redeem, defease, retire, refund or refinance any Subordinated Indebtedness unless such Indebtedness will be subordinated to the Notes or such Guarantor’s Guarantee, as applicable, to at least the same extent as such Subordinated Indebtedness.
(e) For purposes of determining compliance with this Section 4.03 and Section 4.11, (A) Indebtedness need not be Incurred solely by a letter reference to one category of credit issued permitted Indebtedness described in clauses (1) through (18) above or pursuant to the Credit Facilitiesfirst paragraph of this covenant but is permitted to be Incurred in part under any combination thereof and (B) in the event that an item of Indebtedness (or any portion thereof) meets the criteria of one or more of the categories of permitted Indebtedness described in clauses (1) through (18) above or is entitled to be Incurred pursuant to the first paragraph of this covenant, the Company shall, in a principal its sole discretion, classify or reclassify (based on circumstances existing at the time of such reclassification) such item of Indebtedness (or any portion thereof) in any manner that complies with this covenant and will only be required to include the amount not and type of such item of Indebtedness in excess one of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orabove
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The (i) the Company shall not, and shall not permit any of its the Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Company shall not permit any of the Restricted Subsidiary Subsidiaries (other than any Guarantor) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and any Guarantor may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary that is not a Guarantor may incur Incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and or issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of the Company for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided, that the amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors, together with any Refinancing Indebtedness in respect thereof, shall not exceed, in the aggregate, the greater of $60 million and 30% of Consolidated EBITDA as of the date of such Incurrence or issuance (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount).
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) (A) the incurrence Incurrence by the Company or any Restricted Subsidiary of Indebtedness under the ABL Credit Agreement up to an aggregate principal amount outstanding (including the face amount of letters of credit and bankers’ acceptances thereunder) at the time of Incurrence that, together with the aggregate principal amount of Indebtedness outstanding under clause (xvi) below at the time of incurrence, does not exceed an amount equal to the greater of (x) $300 million and (y) the Borrowing Base; provided that the foregoing shall not prohibit discretionary protective advances made under the ABL Credit Agreement in an amount not to exceed 10% in excess of the amount otherwise permitted under this clause (i)(A) at the time of such advance; and (B) the Incurrence by the Company or any Restricted Subsidiary of Indebtedness under the Term Credit Agreement and/or other Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and (including the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, thereunder) up to an aggregate principal amount outstanding at any one time, when taken together with the aggregate principal time of Incurrence that does not exceed an amount (or, if issued with original issue discount, equal to the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (ix) $5,250.0 million200 million and (y) an amount of Secured Indebtedness which, plus on a pro forma basis after giving effect to the incurrence thereof (without giving effect to the netting of proceeds thereof) would not cause the Consolidated Secured Net Leverage Ratio to exceed 3.25 to 1.00;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer Company and any Guarantor the Guarantors of Indebtedness represented by the Initial Notes (not including any Additional Notes), including any Guarantee of and the NotesGuarantees;
(3iii) Indebtedness of the CompanyIndebtedness, the Issuer Preferred Stock and their Subsidiaries in existence Disqualified Stock existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b));
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock synthetic lease obligations, mortgage financings and Preferred Stock incurred purchase money obligations) Incurred by the Company or any of its Restricted SubsidiariesSubsidiary, Disqualified Stock issued by the Company or any Restricted Subsidiary and Preferred Stock issued by any Restricted Subsidiary to finance (whether prior to or within 270 days after) all or any part of the purchaseacquisition, lease lease, construction, repair, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) in an aggregate principal amountamount or liquidation preference that, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock or Preferred Stock then outstanding and Incurred pursuant to this clause (iv), together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this Incurred pursuant to clause (4)xiv) below, does not to exceed 4.0at any one time outstanding the greater of $60 million and 30% of Total Assets at any time outstanding; so long Consolidated EBITDA as such Indebtedness exists at of the date of such purchaseIncurrence or issuance (plus, lease or improvement or is created within 270 days thereafterin the case of any Refinancing Indebtedness, the Additional Refinancing Amount);
(5v) Indebtedness incurred Incurred by the Company or any of its Restricted Subsidiaries Subsidiary constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, and arrangements in connection therewith, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental law or permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company or its any Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of acquisition or purchase price, earnouts price or similar obligationsobligations (including earn-outs), in each case, incurred Incurred or assumed in connection with the Transactions, any Investments or any acquisition or disposition of any business, assets or a SubsidiarySubsidiary not prohibited by this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company to a Restricted Subsidiary; , provided that (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of the Company and its Subsidiaries) any such Indebtedness owing owed to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the obligations of the Company under the Notes; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to any pledge of such Indebtedness constituting a Permitted Lien but not the Company or another Restricted Subsidiarytransfer thereof upon foreclosure) shall be deemed, in each case, to be an incurrence Incurrence of such IndebtednessIndebtedness not permitted by this clause (vii);
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred StockStock not permitted by this clause (viii);
(10ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of the Company and its Subsidiaries), such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (ix);
(x) Hedging Obligations (excluding Hedging Obligations entered into that are not incurred for speculative purposes;
(xi) for the purpose of limiting interest rate risk obligations (including reimbursement obligations with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09letters of credit, exchange rate risk or commodity pricing risk;
(11bank guarantees, warehouse receipts and similar instruments) obligations in respect of performance, bid, appeal and surety bonds and bonds, completion guarantees and similar obligations provided by the Company or any of its Restricted Subsidiaries Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(12) (axii) Indebtedness or Disqualified Stock of the Company and or Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), together with any Refinancing Indebtedness in respect thereof incurred pursuant to clause (xiv) below, does not exceed at any one time outstanding exceed the greater of $900.0 150 million and 60% of Consolidated EBITDA as of the date of such Incurrence or issuance (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount) (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred Indebtedness Incurred pursuant to this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which the Company Company, or such the Restricted Subsidiary Subsidiary, as the case may be, could have incurred Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii)); provided, that the amount of Indebtedness, Disqualified Stock or and Preferred Stock under Section 4.09 (a) hereof without reliance on that may be Incurred or issued, as applicable, pursuant to this clause (12)(b)xii) by Restricted Subsidiaries that are not Guarantors, and any Refinancing Indebtedness of Restricted Subsidiaries that are not Guarantors incurred in respect thereof, shall not exceed, in the aggregate, the greater of $60 million and 30% of Consolidated EBITDA at the time of Incurrence or issuance (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);
(13xiii) the incurrence any guarantee by the Company or any Restricted Subsidiary of Indebtedness or other obligations of the Company or any Restricted Subsidiary so long as the Incurrence of such Indebtedness Incurred by the Company or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that (A) if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee with respect to such Indebtedness shall be subordinated in right of Indebtednesspayment to the Notes or such Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Notes or the Guarantee, as applicable, and (B) if such guarantee is of Indebtedness of the Company, such guarantee is Incurred in accordance with, or not in contravention of, Section 4.11 solely to the extent Section 4.11 is applicable;
(xiv) the Incurrence by the Company or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock, or by any Restricted Subsidiary of Preferred Stock of a Restricted Subsidiary, that serves to refund, refinance, renew, replace or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock which serves issued as permitted under Section 4.03(a) and clauses (i), (ii), (iii), (iv), (xii), (xiv), (xv) and (xix) of this Section 4.03(b) up to refund the outstanding principal amount (or, if applicable, the liquidation preference, face amount, or refinance any Indebtednessthe like) or, if greater, committed amount (only to the extent the committed amount could have been Incurred on the date of initial Incurrence and was deemed Incurred at such time for the purposes of this Section 4.03) of such Indebtedness or Disqualified Stock or Preferred Stock, in each case at the time such Indebtedness was Incurred or Disqualified Stock or Preferred Stock incurred as permitted under was issued pursuant to Section 4.09(a4.03(a) hereof and or clauses (2i), (3ii), (4iii), (iv), (xii), (xiv), (xv) and (12)(axix) of this Section 4.09(b4.03(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including Stock, plus any additional Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), accrued and unpaid interest, expenses, defeasance costs and fees (including consent fees) in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded refunded, refinanced or refinanced,defeased and (y) 91 days following the Stated Maturity of the Notes (provided that this subclause (1) will not apply to any refunding or refinancing of any Secured Indebtedness);
(B2) to the extent such Refinancing Indebtedness refinances (ia) Indebtedness subordinated or pari passu junior to the Notes or any Guarantee thereofa Guarantee, as applicable, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes or the Guarantee at least to the same extent Guarantee, as the Indebtedness being refinanced or refunded applicable, or (iib) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D3) shall not include:
include (ix) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of a Restricted Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of the Company or the Issuer;
a Guarantor, or (iiy) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of an Unrestricted Subsidiary;
(14xv) Indebtedness, Disqualified Stock or Preferred Stock of (xA) the Company or, subject to Section 4.09 (c) hereof, a or any Restricted Subsidiary incurred to finance an acquisition or (yB) Persons that are acquired by the Company or any Restricted Subsidiary or merged are merged, consolidated or amalgamated with or into the Company or a any Restricted Subsidiary in accordance with the terms of this IndentureIndenture (so long as, in the case of this clause (B) such Indebtedness, Disqualified Stock or Preferred Stock is not incurred in contemplation of such acquisition, merger, consolidation or amalgamation); provided that after upon giving effect to such acquisitionacquisition or merger, merger consolidation or amalgamation amalgamation, either:
(A1) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater would be no less than immediately prior to such acquisitionacquisition or merger, merger consolidation or amalgamation;
(15xvi) Indebtedness Incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse to the Company or any Restricted Subsidiary other than a Securitization Subsidiary (except for Standard Securitization Undertakings); provided that the amount of Indebtedness outstanding under this clause (xvi) shall not exceed, when aggregated with all Indebtedness outstanding under clause (i) at the time of Incurrence, the maximum amount permitted under clause (i);
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five Business Days thirty days of its incurrenceIncurrence;
(16xviii) Indebtedness of the Company or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orof
Appears in 1 contract
Sources: Indenture (WABASH NATIONAL Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (ai) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Issuer shall not permit any of its Restricted Subsidiary Subsidiaries (other than a Guarantor) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer and any Restricted Subsidiary may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of the Issuer for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided, however, that Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, by all Subsidiaries other than Guarantors pursuant to this paragraph may not exceed an aggregate of $50.0 million at any one time outstanding.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence of Indebtedness under Credit Facilities Incurrence by the Company, the Issuer or any other Restricted Subsidiary Guarantor of Indebtedness under the Credit Facilities and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to the greater of (a) an aggregate principal amount outstanding of $950.0 million at any one time, when taken together with the time outstanding and (b) an aggregate principal amount that does not cause the Credit Facilities Leverage Ratio of the Issuer, at the time of incurrence, to exceed 2.75 to 1.00 on a pro forma basis from the Issue Date through December 31, 2008, and 3.00 to 1.00 on a pro forma basis at all times thereafter (or, if issued with original issue discount, in both cases including a pro forma application of the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus net proceeds therefrom);
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer and any Guarantor the Guarantors of Indebtedness represented by (i) the Notes Securities (not including any Add-On Securities, but including Additional Notes)Securities in respect of PIK Interest) and the Guarantees, as applicable (including the Exchange Securities and related guarantees thereof) and (ii) Additional Securities issued from time to time as payment of PIK Interest on the Securities and any Guarantee increase in the principal amount of the NotesSecurities as a result of a PIK Payment and, in each case, related guarantees thereof;
(3iii) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b));
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer to finance (whether prior to or within 270 days after) the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets property or the Capital Stock of any Person owning such assets in an property); provided that the aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other amount of Indebtedness, Disqualified Stock and/or and Preferred Stock issued and outstanding under Incurred pursuant to this clause (4), iv) of this Section 4.03(b) shall not to exceed 4.0the greater of $50.0 million and 5% of Total Assets at any one time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5v) Indebtedness incurred Incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company Issuer or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the Transactions or any other acquisition or disposition of any business, assets or a SubsidiarySubsidiary of the Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that that, except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management operations of the Issuer and its Subsidiaries, any such Indebtedness owing owed to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly shall be subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee obligations of the Notes of such GuarantorIssuer under the Securities; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary; provided that, except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management operations of the Issuer and its Subsidiaries, if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor, such Indebtedness shall be subordinated in right of payment to the Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into that are not incurred for speculative purposespurposes and are either: (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; (3) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases or sales or (4) for any combination of the foregoing;
(11xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company Issuer or any of its Restricted Subsidiaries Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) Issuer and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary of the Issuer not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed the greater of $50.0 million and 4.5% of Total Assets at any one the time outstanding exceed $900.0 million of Incurrence (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Indebtedness Incurred under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which the Company Issuer, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii));
(xiii) any guarantee by (x) the Issuer or a Guarantor of Indebtedness or other obligations of the Issuer or any of its Restricted Subsidiaries, (y) a Foreign Subsidiary of Indebtedness or other obligations of another Foreign Subsidiary or (z) a Non Guarantor Subsidiary of Indebtedness or other obligations of another Non Guarantor Subsidiary, in each case so long as the Incurrence of such Indebtedness Incurred by the Issuer or such Restricted Subsidiary could have incurred is permitted under the terms of this Indenture; provided that if such IndebtednessIndebtedness is by its express terms subordinated in right of payment to the Securities or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of such Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantor’s Guarantee with respect to the Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) of a Restricted Subsidiary of the incurrence by the Company Issuer which serves to refund, refinance or defease any Restricted Subsidiary, of Indebtedness, Indebtedness Incurred or Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred issued as permitted under Section 4.09(a4.03(a) hereof and clauses (2ii), (3iii), (4iv), (xiv), (xv), (xix) and (12)(axx) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund refund, refinance or refinance defease such Indebtedness, Disqualified Stock or Preferred Stock Stock, including additional any Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), expenses, defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the remaining Weighted Average Life to Maturity shorter of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectivelyeach instance thereof, an “incurrence”) ), with respect to any Indebtedness (including Acquired Indebtedness) ), and the Company will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a4.07(a) hereof shall not apply toprohibit the incurrence of:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer Company or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof); provided, and however, that immediately after giving effect to any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtednessincurrence, up to an the then outstanding aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any all Indebtedness permitted under this clause (1) or any portion thereofdoes not exceed the sum of (x) $1,640.0 million plus (y) the greater of (i) $400.0 million and (ii) 100% of LTM EBITDA plus (z) the maximum principal amount of Indebtedness that could be incurred under this subclause (z) such that after giving effect to such incurrence, the aggregate amount Consolidated Secured Net Leverage Ratio of fees, underwriting discounts, premiums the Company would be no greater than 3.25 to 1.00 (calculated assuming that all Indebtedness incurred under this clause (1) is secured and other costs and expenses Incurred in connection with without netting the cash proceeds of any such refinancingIndebtedness);
(2) the incurrence by Indebtedness of the Issuer and any Guarantor of Indebtedness represented by under the Notes (not including Guarantees thereof) (other than any Additional Notes), including any Guarantee of the Notes;
(3) Indebtedness and Disqualified Stock of the Company, the Issuer Company and their its Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described or Disqualified Stock referred to in clauses (1), (7) and (2) 8) of this Section 4.09(b4.07(b));
(4) Indebtedness (including in respect of Capitalized Lease Obligations), Disqualified Stock Synthetic Lease Obligations and Preferred Stock incurred by the Company purchase money obligations for fixed or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such capital assets in an aggregate principal amount, together with amount at any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and time outstanding under this clause (4), not to exceed 4.0the greater of (x) $50.0 million and (y) 12.5% of Total Assets at any time outstandingLTM EBITDA; so long as provided that either (a) the Indebtedness related thereto does not exceed the cost or fair market value, whichever is lower, of the property being financed and such Indebtedness exists at the date of such purchase, lease purchase or improvement transaction or is created within 270 days thereafterthereafter (for the avoidance of doubt, the purchase date for any asset shall be the later of the date of completion of installation and the beginning of the full productive use of such asset) or (b) the Indebtedness related thereto does not exceed the fair market value of the property being financed and after giving effect to the incurrence of any such Indebtedness and, after giving effect thereto (and the use of the proceeds therefrom), the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.07(a);
(5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, death, disability or other employee benefits or property, casualty or liability insurance, or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations (a) are reimbursed within 30 days following such drawing or incurrenceincurrence or (b) are permitted to be incurred (and thereupon shall be deemed to be incurred) pursuant to clause (1) above following the expiry of such 30 day period;
(6) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, including earnouts, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Issuer to the Company to or a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor (other than the Issuer) is expressly shall be subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any the Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of the Company or a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if the Issuer or a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than or the Issuer), such Indebtedness is expressly shall be subordinated in right of payment to the Guarantee of the Notes of such GuarantorGuarantor or the Notes, in the case of the Issuer; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed in each case to be an issuance of such shares of Preferred StockStock not permitted by this clause (9);
(10) Hedging Obligations Swap Contracts (excluding Hedging Obligations Swap Contracts entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness of the Company or any Restricted Subsidiary permitted to be incurred pursuant to this Section 4.094.07, exchange rate risk or commodity pricing risk;
(11) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal appeal, stay, surety, customs and surety replevin bonds and performance and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencepreference that, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b12), does not at any one time outstanding exceed the greater of (x) $900.0 200.0 million and (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12y) (b) shall cease to be deemed incurred or outstanding for purposes 50.0% of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b))LTM EBITDA;
(13) the incurrence or issuance by the Company or any Restricted SubsidiarySubsidiary of Indebtedness or Disqualified Stock, and the issuance by any Restricted Subsidiary of IndebtednessPreferred Stock, in each case that serves to refund, refinance, replace, renew, extend or defease any Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary or Preferred Stock which serves to refund of any Restricted Subsidiary incurred or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred issued as permitted under Section 4.09(a4.07(a) hereof and clauses or clause (2), (3), ) or (4) and (12)(a) of this Section 4.09(b4.07(b), this clause (13) and or clause (14) of this Section 4.09(b4.07(b) or any Indebtedness, Disqualified Stock or Preferred Stock previously incurred or issued to so refund refund, refinance, replace, renew, extend or refinance defease such Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock Stock, including additional Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to pay premiums (including reasonable tender premiums), defeasance costs costs, accrued interest, fees and fees expenses in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which that is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock being refunded refunded, refinanced, replaced, renewed, extended or refinanced,defeased (or requires no or nominal payments in cash prior to the date that is 91 days after the Maturity Date of the Notes);
(B) to the extent such Refinancing Indebtedness refinances refunds, refinances, replaces, renews, extends or defeases (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereofSubordinated Indebtedness, such Refinancing Indebtedness is subordinated or pari passu in right of payment to the Notes or the Guarantee thereof at least to the same extent as the Indebtedness being refinanced refunded, refinanced, replaced, renewed, extended or refunded defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,; and
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not the Issuer or a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the IssuerCompany;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not the Issuer or a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Guarantor or the IssuerSubsidiary Guarantor; or
(iii) Indebtedness or Disqualified Stock of the Company or Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; and provided further that subclause (a) of this clause (13) will not apply to any refunding, refinancing, replacement, renewal, extension or defeasance of any Secured Indebtedness;
(14) (x) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred or issued to finance an acquisition (or other purchase of assets) or (y) existing Indebtedness, Disqualified Stock or Preferred Stock of Persons that are acquired by the Company or any Restricted Subsidiary or merged into or amalgamated into consolidated with the Company or a Restricted Subsidiary in accordance with the terms of this IndentureIndenture that is not incurred or issued in contemplation of such acquisition, merger or consolidation; provided that in the case of (x) and (y) after giving effect to such acquisition, merger or amalgamation either
consolidation, either (Aa) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a4.07(a) hereof, or
or (Bb) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamationconsolidation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orand
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall Borrower will not, and shall will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) ), with respect to any Indebtedness (including Acquired Indebtedness) ), and the Company Borrower will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, provided that so long as no Event of Default has occurred and is continuing the Company Borrower may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and or issue shares of Preferred Stock, if the Fixed Charge Borrower’s Interest Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ Borrower’s most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued Test Period would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of the proceeds therefrom had occurred at the beginning of such four-quarter periodTest Period; provided, further, that (x) such Indebtedness, Disqualified Stock or Preferred Stock complies with the Required Additional Debt Terms and (y) any incurrence of Indebtedness or issuance of Disqualified Stock or Preferred Stock by any Restricted Subsidiary that is not a Subsidiary Guarantor pursuant to this clause (a) shall be subject to the limitations set forth in Section 6.01(g).
(b) The provisions limitations set forth in clause (a) of this Section 4.09(a) hereof 6.01 shall not apply toto any of the following items:
(i) Indebtedness under any Receivables Facility; provided that any Indebtedness incurred under this subclause (i) shall reduce (for so long as, and to the extent that, the Indebtedness referred to in this subclause (i) remains outstanding) dollar-for-dollar the aggregate amount of Indebtedness permitted to be incurred under Section 6.01(b)(iii)(y);
(ii) Indebtedness of the Borrower and any of its Restricted Subsidiaries under the Loan Documents;
(iii) Indebtedness under the ABL Credit Agreement, when aggregated with the then outstanding amount of Indebtedness under subclause 6.01(b)(xv) incurred to refinance Indebtedness permitted by this subclause (iii), in an amount not to exceed the greater of (x) $500.0 million and (y) the Borrowing Base (as defined in the ABL Credit Agreement as in effect on the date hereof); provided that (1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under to be incurred pursuant to this clause subclause (1iii)(y) or any portion thereof, shall be reduced dollar-for-dollar by the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee of the Notes;
(3) Indebtedness of the Company, the Issuer and their Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1then outstanding under Section 6.01(b)(i) and (2) of this Section 4.09(b))no Domestic Subsidiary other than a Loan Party shall at any time be an obligor under such Indebtedness;
(4iv) Indebtedness arising under (x) the 2021 Senior Notes in an aggregate principal amount, when aggregated with the then outstanding amount of Indebtedness under subclause (b)(xv) incurred to refinance Indebtedness permitted by this subclause (b)(iv)(x), not to exceed $845.0 million and (y) the 2020 Senior Notes in an aggregate principal amount, when aggregated with the then outstanding amount of Indebtedness under subclause (b)(xv) below incurred to refinance Indebtedness permitted by this subclause (b)(iv)(y), in an aggregate principal amount not to exceed $400.0 million, provided that if the aggregate principal amount of the Repurchased Notes accepted for repurchase in the Tender Offer is less than $400.0 million, the aggregate principal amount of the 2020 Senior Notes permitted by this subclause (b)(iv)(y) shall be increased by the aggregate principal amount of the Redeemed Notes called for redemption through the irrevocable notice delivered on the Closing Date under Section 4.01(j) until such Redeemed Notes are redeemed; provided, further, that, in each case, no Person other than a Loan Party shall at any time be an obligor under such Indebtedness;
(v) Indebtedness (other than Indebtedness under the ABL Credit Agreement, the 2020 Senior Notes and the 2021 Senior Notes) existing on the Closing Date; provided that any Indebtedness which is in excess of (x) $5.0 million individually or (y) $25.0 million in the aggregate (when taken together with all other Indebtedness outstanding in reliance on this subclause (b)(v) that is not set forth on Schedule 6.01)) shall only be permitted under this subclause (b)(v) to the extent such Indebtedness is set forth on Schedule 6.01;
(vi) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Company Borrower or any of its the Restricted Subsidiaries, Subsidiaries to finance the development, construction, purchase, lease (other than the lease, pursuant to Sale and Lease-Back Transactions, of property (real or personal), equipment or other fixed or capital assets owned by the Borrower or any Restricted Subsidiary as of the Closing Date or acquired by the Borrower or any Restricted Subsidiary after the Closing Date in exchange for, or with the proceeds of the sale of, such assets owned by the Borrower or any Restricted Subsidiary as of the Closing Date), repairs, additions or improvement of property (real or personal) ), equipment or equipment other fixed or capital assets; provided that is used at the time of incurrence of such Indebtedness or useful in a Similar Businessissuance of such Disqualified Stock or Preferred Stock, whether through the direct purchase aggregate amount of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other outstanding Indebtedness, Disqualified Stock and/or and Preferred Stock issued and outstanding under permitted by this clause subclause (4b)(vi), when aggregated with the then outstanding amount of Indebtedness under subclause (b)(xv) below incurred to refinance Indebtedness permitted by this subclause (b)(vi), in an amount not to exceed 4.0the greater of (A) $150.0 million and (B) 35% of Total Assets at EBITDA of the Borrower for the most recently ended Test Period as of the time any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterincurred;
(5vii) Indebtedness incurred by the Company Borrower or any of its Restricted Subsidiaries Subsidiary constituting reimbursement obligations with respect to letters of credit or surety bonds issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; providedprovided that, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 thirty (30) days following such drawing or incurrence;
(6viii) Indebtedness arising from agreements of the Company Borrower or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
provided that (A) such Indebtedness is not reflected on the balance sheet of the Company Borrower or any of its Restricted Subsidiaries Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will shall not be deemed to be reflected on such balance sheet for purposes of this clause subclause (6A)) (a)); and
and (B) the maximum assumable liability in respect of all such Indebtedness (other than for those indemnification obligations that are not customarily subject to a cap) shall at no time exceed the gross proceeds including non-cash noncash proceeds (the fair market value of such non-cash noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company Borrower and its the Restricted Subsidiaries in connection with such disposition;
(7ix) Indebtedness of the Company Borrower owing to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor (other than the Issuer) is expressly unsecured and subordinated in right of payment to the NotesObligations; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of --80- any such Indebtedness (except to the Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this subclause (b)(ix);
(x) Indebtedness of a Restricted Subsidiary owing to the Borrower or another Restricted Subsidiary; provided that (A) if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Subsidiary Guarantor, such Indebtedness is unsecured and subordinated in right of payment to the obligations of such Subsidiary Guarantor under its Loan Guaranty and (B) any Indebtedness of a Restricted Subsidiary that is not a Loan Party owing to a Loan Party was made by such Loan Party in compliance with Section 6.07; provided, further, that any subsequent issuance or transfer of Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this subclause (b)(x);
(xi) subject to compliance with Section 6.07, shares of Preferred Stock of a Restricted Subsidiary issued to the Borrower or another Restricted Subsidiary; provided that any subsequent issuance or transfer of Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Preferred Stock (except to the Company Borrower or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred StockStock not permitted by this subclause (b)(xi);
(10xii) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting limiting: (A) interest rate risk with respect to any Indebtedness that is permitted under this Agreement to be incurred pursuant to this Section 4.09outstanding, (B) exchange rate risk or (C) commodity pricing risk;
(11xiii) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company Borrower or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12A) (a) subject to compliance with Section 6.07, any guarantee by the Borrower or a Restricted Subsidiary of Indebtedness or Disqualified Stock other obligations of any Restricted Subsidiary, so long as, in the case of any guarantee of Indebtedness, the incurrence of such Indebtedness is permitted under the terms of this Agreement or (B) any guarantee by a Restricted Subsidiary of Indebtedness of the Company Borrower is permitted to be incurred under the terms of this Agreement; provided, in each case, that in the case of any guarantee of Indebtedness of the Borrower or any Subsidiary Guarantor by any Restricted Subsidiary that is not a Subsidiary Guarantor, such Restricted Subsidiary executes a Joinder Agreement in order to become a Subsidiary Guarantor under this Agreement and otherwise complies with Section 5.11 as if such Restricted Subsidiary is a newly acquired or formed Domestic Subsidiary; provided further, that no Restricted Subsidiary that is a Foreign Subsidiary shall become a Subsidiary Guarantor without the consent of the Agent;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of the Company Borrower or any Restricted Subsidiary equal that serves to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue extend, replace, refund, refinance, renew or sale of Equity Interests of the Company or defease any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock Person incurred as permitted under Section 4.09(a) hereof and clauses clause (2), (3), (4) and (12)(aa) of this Section 4.09(b6.01 and subclauses (b)(iii), this clause (13iv), (v) and clause (14vi) of above, this Section 4.09(bsubclause (b)(xv) or any Indebtednessand subclauses (b)(xvi), Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness(b)(xvii) and (b)(xx)(B) below, Disqualified Stock or Preferred Stock including and additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums and fees (including reasonable tender lender premiums), defeasance costs and fees ) in connection therewith (the collectively, “Refinancing Indebtedness”) prior to its respective maturity); provided, that such Refinancing Indebtednesshowever, that:
(A) such Refinancing Indebtedness has a (1) Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded extended, replaced, refunded, refinanced, renewed or defeased and (2) maturity date that is no shorter than the maturity date of the Indebtedness, Disqualified Stock or Preferred Stock being extended, replaced, refunded, refinanced, renewed or defeased,
(B) to the extent such Refinancing Indebtedness refinances extends, replaces, refunds, refinances, renews or defeases (i1) Indebtedness subordinated or pari passu to the Notes Obligations or the Loan Guaranty of any Guarantee thereofSubsidiary Guarantor, such Refinancing Indebtedness is subordinated or pari passu to the Notes Obligations or the Guarantee such Loan Guaranty at least to the same extent as the Indebtedness being refinanced extended, replaced, refunded, refinanced, renewed or refunded defeased or (ii2) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
include (D) shall not include:
(i1) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company that is not a Subsidiary Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
Borrower, (ii2) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company that is not a Subsidiary Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary Guarantor or the Issuer; or
(iii3) Indebtedness, Disqualified Stock or Preferred Stock of the Company Borrower or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary,
(D) such Refinancing Indebtedness shall be in an aggregate principal amount (or accreted value, if applicable) that does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness, Disqualified Stock or Preferred Stock so modified, refinanced, refunded, renewed or extended except by an amount equal to unpaid accrued interest and premium thereon plus other reasonable amounts paid, and fees and expenses reasonably incurred, in connection with such extension, replacement, refunding, refinancing, renewal or defeasance,
(E) if such Indebtedness, Disqualified Stock or Preferred Stock being so extended, replaced, refunded, refinanced, renewed or defeased is secured by a Lien on the Collateral, the Lien securing such Refinancing Indebtedness shall not be senior in priority to the Lien on the Collateral securing the Indebtedness, Disqualified Stock or Preferred Stock being so extended, replaced, refunded, refinanced, renewed or defeased unless otherwise permitted under this Agreement and any such Liens shall be subject to a First Lien Intercreditor Agreement or Junior Lien Intercreditor Agreement, as applicable,
(F) the terms and conditions (including, if applicable, as to collateral but excluding as to subordination, interest rate and redemption premium) of any such Refinancing Indebtedness, taken as a whole, are not materially less favorable to the lenders of such Refinancing Indebtedness than the terms and conditions of the Indebtedness, Disqualified Stock or Preferred Stock being extended, replaced, refunded, refinanced, renewed or defeased, and
(G) to the extent such Indebtedness, Disqualified Stock or Preferred Stock being extended, replaced, refunded, refinanced, renewed or defeased is unsecured, such Refinancing Indebtedness is unsecured; provided, further, that any incurrence of Indebtedness or issuance of Disqualified Stock or Preferred Stock by any Restricted Subsidiary that is not a Subsidiary Guarantor pursuant to this --82- subclause (b)(xv) shall be subject to the limitations set forth in Section 6.01(g) to the same extent as the Indebtedness refinanced;
(14xvi) Indebtedness, Disqualified Stock or Preferred Stock of (x) of the Company or, subject to Section 4.09 (c) hereof, a Borrower or any Restricted Subsidiary incurred to finance an acquisition any Investment permitted by subclause (c)(i)(A) or (B) or (c)(iii) of the definition of “Permitted Investments” or (y) of Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, ora
Appears in 1 contract
Sources: Credit Agreement (Clean Harbors Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Company shall not permit any of its Restricted Subsidiary Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company any Issuer and any Restricted Subsidiary may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of the Company for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4A.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $770.0 million outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus ;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer Issuers and any Guarantor the Guarantors of Indebtedness represented by (x) the Notes Original Securities (not including any Additional Notes)Securities) and the Guarantees, as applicable (including any Guarantee of the Notes;
Exchange Securities and guarantees thereof) and (3y) Indebtedness of the Company, the Issuer and their Subsidiaries in existence Second Lien Notes issued on the Issue Date or and the Merger related guarantees thereof (including exchange Second Lien Notes and related guarantees thereof);
(iii) Indebtedness existing on the Issue Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4A.03(b));
(4a) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company to finance (whether prior to or within 270 days after) the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued and then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed 4.0the greater of $75.0 million and 5.0% of Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the Transactions or any other acquisition or disposition of any business, assets or a SubsidiarySubsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing owed to a Restricted Subsidiary that is not neither Finance Co. nor a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notesobligations of the Company under the Securities; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence Incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not Finance Co. or a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) the Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into that are not incurred for speculative purposespurposes and either: (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases or sales;
(11xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amount or liquidation preferenceamount, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed $100.0 million at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Indebtedness Incurred under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4A.03(a) hereof from and after the first date on which the Company, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4A.03(a) without reliance upon this clause (xii));
(xiii) any guarantee (or co-issuance in the case of Finance Co.) by an Issuer or a Guarantor of Indebtedness or other obligations of the Company or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by the Company or such Restricted Subsidiary could have incurred is permitted under the terms of this Indenture; provided that if such IndebtednessIndebtedness is by its express terms subordinated in right of payment to the Securities or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee (or co-issuance in the case of Finance Co.) of such Guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Securities such Guarantor’s Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by of a Restricted Subsidiary of the Company which serves to refund, refinance or defease any Restricted Subsidiary, of Indebtedness, Indebtedness Incurred or Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred issued as permitted under Section 4.09(a4A.03(a) hereof and clauses (2ii), (3iii), (4iv), (xiv), (xv), (xix) and (12)(axx) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4A.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock Stock, including additional any Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,refinanced and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date one year following the last maturity date of any Securities then outstanding were instead due on such date one year following the last date of maturity of the Securities;
(B) has a Stated Maturity which is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or (y) 91 days following the last maturity date of the Securities;
(C) to the extent such Refinancing Indebtedness refinances (ia) Indebtedness subordinated equal to or pari passu junior to the Notes Securities or any the Guarantee thereofof such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is subordinated equal to or pari passu junior, as applicable, to the Notes Securities or the Guarantee at least to the same extent of such Restricted Subsidiary, as the Indebtedness being refinanced or refunded applicable, or (iib) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and;
(D) is Incurred in an aggregate amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium, fees and expenses Incurred in connection with such refinancing;
(E) shall not include:
include (ix) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of a Restricted Subsidiary of the Company that is not neither Finance Co. nor a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company that is not an Issuer or a Guarantor Guarantor, or (other than the Issuery) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of an Unrestricted Subsidiary;; and
(14F) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4A.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xx) of this Section 4A.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4A.03(b); provided, further, that subclauses (1) and (2) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities or any Senior Indebtedness.
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a or any of its Restricted Subsidiary incurred Subsidiaries Incurred to finance an acquisition or (y) Persons that are acquired by the Company or any of its Restricted Subsidiary Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided provided, however, that after giving effect to such acquisition, merger or amalgamation acquisition and the Incurrence of such Indebtedness either:
(A) the Company would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in the first sentence of Section 4.09(a) hereof, 4A.03(a); or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or would be greater than immediately prior to such acquisition, merger or amalgamation;
(15xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five Business Days of its incurrenceIncurrence;
(16xviii) Indebtedness of the Company or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit FacilitiesAgreement, in a principal amount not in excess of the stated amount of such letter of credit;
(17xix) Contribution Indebtedness;
(Axx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) Indebtedness of the Company or any guarantee Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and
(xxii) Indebtedness issued by the Company or a Restricted Subsidiary to current or former officers, directors and employees thereof or any direct or indirect parent thereof, or their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Indebtedness Equity Interests of the Company or other obligations any of any Restricted Subsidiary so long as its direct or indirect parent companies to the incurrence of such Indebtedness incurred by such Restricted Subsidiary is extent permitted under the terms of this Indenture, orSection 4A.04(b)(iv).
Appears in 1 contract
Sources: Indenture (Verso Paper Corp.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise otherwise, with respect to (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) Debt), and the Company will shall not issue any shares of Disqualified Stock and will the Company shall not permit any of its Restricted Subsidiary Subsidiaries to issue any shares of Disqualified Stock or Preferred Stockpreferred stock; provided, however, that the Company may incur Indebtedness (including Acquired IndebtednessDebt) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary Guarantor may incur Indebtedness (including Acquired IndebtednessDebt), issue shares of Disqualified Stock and or issue shares of Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock preferred stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 1.00 (the “Fixed Charge Coverage Test”)1.0, determined on a pro forma basis Pro Forma Basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, incurred or the Disqualified Stock or Preferred Stock the preferred stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided, further, that the U.S. Borrower may incur Indebtedness in connection with serving as a co-obligor or guarantor of Indebtedness incurred by the Company or any Restricted Subsidiary that is otherwise permitted by this covenant.
(b) The provisions of limitations set forth in Section 4.09(a6.2(a) hereof shall not apply to:prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1i) the incurrence of the Indebtedness under Credit Facilities by the Company, the Issuer or this Agreement and any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingLoan Document;
(2ii) the incurrence by the Issuer and Company or any Guarantor of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee and letters of the Notes;
(3) Indebtedness of the Company, the Issuer and their Subsidiaries in existence on the Issue Date credit under one or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Company or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets more Credit Facilities in an aggregate principal amount, together with amount at any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and time outstanding under this clause (4), ii) not to exceed 4.0% $150,000,000, less the amount of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterNon-Recourse Debt outstanding under clause (xvii) below;
(5iii) the incurrence by the Company and its Restricted Subsidiaries of the Indebtedness incurred existing on the Closing Date and set forth on Schedule 6.2(b)(iii);
(iv) the incurrence by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of businessIndebtedness represented by Capital Lease Obligations, including letters of credit in respect of workers’ compensation claims, mortgage financings or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar money obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of acquiring assets or a business that is a Permitted Business or financing such acquisition; providedall or any part of the purchase price or cost of design, that
construction, installation or improvement of property, plant or equipment (Aincluding, without limitation, Vessels and Related Assets) such Indebtedness is not reflected on used in the balance sheet business of the Company or any of its Restricted Subsidiaries (contingent obligations referred whether through the direct purchase of such property, plant or equipment or the Capital Stock of any Person owning such property, plant or equipment), and Permitted Refinancing Indebtedness in respect thereof, in an aggregate amount not to in a footnote to financial statements exceed at any time outstanding the greater of (A) $12,500,000 and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) 3.0% of Total Tangible Assets;
(v) Indebtedness of the maximum assumable liability Company or any of its Restricted Subsidiaries incurred to finance the replacement (through construction, acquisition, lease or otherwise) of one or more Vessels or Related Assets in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value Vessel, upon a total loss, destruction, condemnation, confiscation, requisition, seizure, forfeiture or other taking of title to or use of such non-cash Vessel (collectively, a “Total Loss”) in an aggregate amount no greater than the ready for sea cost (as determined in good faith by the Company) for such replacement Vessel, in each case, less all compensation, damages and other payments (including insurance proceeds being measured at the time received and without giving effect to any subsequent changes other than in valuerespect of business interruption insurance) actually received by the Company and or any of its Restricted Subsidiaries from any Person in connection with such dispositionthe Total Loss in excess of amounts actually used to repay Indebtedness secured by the Vessel subject to the Total Loss;
(7vi) Indebtedness of Company or any Restricted Subsidiary incurred in relation to: (i) maintenance, repairs, refurbishments and replacements required to maintain the classification of any of the Vessels owned, leased, time chartered or bareboat chartered to or by the Company to a or any Restricted Subsidiary; provided (ii) drydocking of any of the Vessels owned or leased by the Company or any Restricted Subsidiary for maintenance, repair, refurbishment or replacement purposes in the ordinary course of business; and (iii) any expenditures which will or may reasonably expected to be recoverable from insurance on such Vessels;
(vii) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in respect of Indebtedness (other than intercompany Indebtedness) that any such was permitted by this Agreement to be incurred under Section 6.2(a) or clause (iii), (iv), (v), (vi), (vii), (xiv) or (xx) of this Section 6.2(b);
(viii) the incurrence of Indebtedness owing by the Company owed to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in and Indebtedness by any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except owed to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another any other Restricted Subsidiary; provided provided, however, that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in upon any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or such Indebtedness being owed to any Person other than the Company or a Restricted Subsidiary, the Company or such Restricted Subsidiary, as applicable, shall be deemed to have incurred Indebtedness not permitted by this clause (viii);
(ix) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of Disqualified Stock or preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Stock or preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such shares of Preferred Disqualified Stock (except or preferred stock to a Person that is neither the Company or another nor a Restricted Subsidiary of its Restricted Subsidiaries) shall the Company; will be deemed deemed, in each case case, to be constitute an issuance of such shares of Preferred StockDisqualified Stock or preferred stock by such Restricted Subsidiary that is not permitted by this clause (ix);
(10x) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided incurrence by the Company or any of its Restricted Subsidiaries of Permitted Hedging Obligations;
(xi) the guarantee by the Company or any Guarantor of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 6.2; provided that if the Indebtedness being guaranteed is contractually subordinated to the Loans or a Guarantee, then the guarantee shall be contractually subordinated to the same extent as the Indebtedness guaranteed;
(xii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, unemployment insurance, health, disability and other employee benefits or property, casualty or liability insurance, self-insurance obligations, bankers’ acceptances, or performance, completion, bid, appeal and surety bonds, in each case, in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13xiii) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) of Indebtedness 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 businessfunds, provided that so long as such Indebtedness is extinguished covered within five Business Days of its incurrenceDays;
(16xiv) Indebtedness, Disqualified Stock or preferred stock of (x) the Company or a Restricted Subsidiary incurred or issued to finance an acquisition or (y) a Person acquired by the Company or a Restricted Subsidiary or merged, consolidated, amalgamated or liquidated with or into a Restricted Subsidiary or the Company; provided, however, that after giving effect to such incurrence or issuance (and the related acquisition, merger, consolidation, amalgamation or liquidation), the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness of is incurred or such Disqualified Stock or preferred stock is issued, as the case may be, determined on a Pro Forma Basis would have been (i) at least 2.0 to 1.0 or (ii) not less than immediately prior to such transactions;
(xv) the incurrence by the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to Indebtedness consisting of guarantees, earn-outs, indemnities or obligations in respect of purchase price adjustments in connection with the Credit Facilitiesdisposition or acquisition of assets, in a principal amount not in excess including, without limitation, shares of the stated amount of such letter of creditCapital Stock;
(17xvi) Non-Recourse Debt incurred by a Securitization Subsidiary in a Qualified Securitization Transaction;
(Axvii) any guarantee the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit so long each such obligation is satisfied within 30 days of the incurrence thereof;
(xviii) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness, Disqualified Stock or preferred stock in an aggregate amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred pursuant to this clause (xviii) not to exceed the greater of (A) $15,000,000 and (B) 4.0% of Total Tangible Assets;
(xix) Permitted Credit Agreement Refinancing Debt;
(xx) Permitted Incremental Indebtedness; and
(xxi) Contribution Indebtedness.
(c) For purposes of determining compliance with this Section 6.2, in the event that an item of proposed Indebtedness, Disqualified Stock or preferred stock meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xxi) of Section 6.2(b), or is entitled to be incurred pursuant to Section 6.2(a), the Company, in its sole discretion, may divide, classify and/or reclassify such item of Indebtedness, Disqualified Stock and preferred stock (or any portion thereof) on the date of its incurrence, or later re-divide and/or reclassify, all or a portion of such item of Indebtedness, Disqualified Stock and preferred stock, in any manner that complies with this Section 6.2.
(d) The accrual of interest, the accrual of dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock or preferred stock in the form of additional shares of the same class of Disqualified Stock or preferred stock, as the case may be, shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 6.2; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued.
(e) The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value of such Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness;
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person that is secured by such assets; and
(4) in respect of the Indebtedness incurred by a Securitization Subsidiary, the amount of Obligations outstanding under the legal documents entered into as part of a Qualified Securitization Transaction on any date of determination characterized as principal or that would be characterized as principal if such securitization were structured as a secured lending transaction rather than as a purchase.
(f) For purposes of determining compliance with this Section 6.2, (i) Acquired Debt shall be deemed to have been incurred by the Company or its Restricted Subsidiaries, as the case may be, at the time an acquired Person becomes such a Restricted Subsidiary of Indebtedness the Company (or other obligations is merged into the Company or such a Restricted Subsidiary) or at the time of the acquisition of assets, as the case may be, (ii) the maximum amount of Indebtedness, Disqualified Stock or preferred stock that the Company and its Restricted Subsidiaries may incur pursuant to this Section 6.2 shall not be deemed to be exceeded, with respect to any outstanding Indebtedness, Disqualified Stock or preferred stock due solely to the result of fluctuations in the exchange rates of currencies and (iii) the outstanding principal amount of any Restricted Subsidiary particular Indebtedness shall be counted only once and any obligations arising under any guarantee, Lien, letter of credit or similar instrument supporting such Indebtedness permitted to be incurred under this covenant shall not be double counted.
(g) For purposes of determining compliance of any non-U.S. dollar-denominated Indebtedness with this Section 6.2, the amount outstanding under any U.S. Dollar Equivalent principal amount of Indebtedness denominated in a foreign currency shall at all times be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness (in each case determined, if available, by the rate of exchange quoted by Reuters at 10:00 a.m. (New York time) on the date of determination for spot purchases of the non-U.S. dollar currency with U.S. dollars and otherwise in accordance with customary practice); provided, however, that if such Indebtedness is incurred to refinance other Indebtedness denominated in the same or different currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the incurrence principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced.
(h) For purposes of the calculation of the Fixed Charge Coverage Ratio, in connection with the incurrence of any Indebtedness pursuant to Section 6.2(a), (i) the Company may elect, pursuant to an Officer’s Certificate delivered to the Administrative Agent, to treat all or any portion of the commitment under any Indebtedness which is to be incurred, as being incurred as of the applicable date of determination and any subsequent incurrence of Indebtedness under such commitment that was so treated shall not be deemed, for purposes of this calculation, to be an incurrence of additional Indebtedness; provided that if the Company have made such an election, in connection with the calculation of any ratio or basket for any purpose under this Agreement on or following such date until terminated, such calculation shall include the portion of the Indebtedness which has been deemed incurred, or secured by such Restricted Subsidiary is permitted under Lien, as the terms case may be, as of this Indenture, orthe applicable date of determination and (ii) such calculation shall not give effect to any Indebtedness incurred on such date of determination pursuant to the provisions described in Section 6.2(b) (other than clause (b)(xiv) thereof).
Appears in 1 contract
Sources: Credit Agreement (Navios Maritime Midstream Partners LP)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Holdings III shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company Holdings III will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, that the Company Holdings III may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company Holdings III and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the CompanyHoldings III, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one timeamount, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of million outstanding at any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingone time;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee of the Notes;
(3) Indebtedness of the Company, the Issuer Holdings III and their its Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Company Holdings III or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred by the Company Holdings III or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company Holdings III or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company Holdings III or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a6)(a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company Holdings III and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company Holdings III to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Holdings III or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company Holdings III or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company Holdings III or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Holdings III or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Holdings III or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company Holdings III or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company Holdings III and Indebtedness, Disqualified Stock or Preferred Stock of the Company Holdings III or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company Holdings III since immediately after the Transaction Measurement Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies Holdings III or cash contributed to the capital of the Company Holdings III (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company Holdings III or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company Holdings III and Indebtedness, Disqualified Stock or Preferred Stock of the Company Holdings III or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b12)(b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company Holdings III or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a4.09(a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company Holdings III or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(DC) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Holdings III that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company Holdings III or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Holdings III that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company Holdings III or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company Holdings III or, subject to Section 4.09 (c4.09(c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Holdings III or any Restricted Subsidiary or merged or amalgamated into the Company Holdings III or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company Holdings III would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company Holdings III and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger acquisition or amalgamationmerger;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company Holdings III or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company Holdings III or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Sources: Indenture (Freescale Semiconductor Holdings I, Ltd.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (ai) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Issuer shall not permit any of its Restricted Subsidiary Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer and any Restricted Subsidiary of the Issuer may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Debt to Adjusted EBITDA Ratio on a consolidated basis of the Issuer for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 be less than or equal to 6.75 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:to (collectively, “Permitted Debt”):
(1i) the incurrence Incurrence by the Issuer or its Restricted Subsidiaries of Indebtedness under any Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreements and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $4,000.0 million outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus ;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer and (and, if applicable, any Guarantor Guarantors) of Indebtedness represented by the Notes (not including any Additional Notes) (and the Guarantees, as applicable) and any Exchange Notes (and exchange guarantees thereof, as applicable), including any Guarantee of the Notes;
(3iii) Indebtedness of the Company, the Issuer and their its Restricted Subsidiaries in existence existing on the Issue Date or Date, including any Indebtedness Incurred on the Merger Issue Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b));
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer to finance (whether prior to or within 270 days after) the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued and then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed 4.0the greater of (x) $450.0 million and (y) 4% of Total Assets at any time outstanding; so long as such Indebtedness exists of the Issuer at the date time of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company Issuer or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the Transactions or the disposition of any business, assets or a SubsidiarySubsidiary of the Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the obligations of the Issuer under the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into other than for speculative purposes): (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; or (2) for the purpose of fixing or hedging currency exchange rate risk or commodity pricing riskwith respect to any currency exchanges;
(11xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and bonds, completion guarantees and the Lockheed Note provided by the Company Issuer or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) Issuer and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary of the Issuer not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencewhich, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed the greater of (x) $450.0 million and (y) 4% of Total Assets of the Issuer at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Incurred or issued under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which the Company Issuer or such the Restricted Subsidiary Subsidiary, as the case may be, could have incurred Incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a4.03(a) hereof without reliance on upon this clause (12)(bxii));
(13xiii) the incurrence any guarantee by the Company Issuer or a Restricted Subsidiary of Indebtedness or other obligations of the Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness or other Obligations by the Issuer or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of Indebtednesssuch guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Notes or such Guarantor’s Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Notes or the Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Issuer which serves to refund or refinance or defease any Indebtedness, Indebtedness Incurred or Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a4.03(a) hereof and clauses (2ii), (3iii), (4iv), (xiv), (xv), (xix), (xx) and (12)(axxii) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock Stock, including additional any Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,refinanced and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date one year following the last maturity date of any Notes then outstanding were instead due on such date one year following the last date of maturity of any Notes then outstanding;
(B2) to the extent such Refinancing Indebtedness refinances (ia) Indebtedness subordinated or pari passu junior to the Notes or any Guarantee thereofNotes, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (iib) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,;
(C3) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium and fees Incurred in connection with such refinancing;
(4) shall not include Indebtedness of the Issuer or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(5) in the case of any Refinancing Indebtedness in respect Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of Indebtedness under the Senior Credit Facilitiesthis Section 4.03(b), the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required deemed to have been Incurred and to be incurred substantially contemporaneously with the related refinancing outstanding under such clause (iv) or (xx) of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoingthis Section 4.03(b), as applicable, within 45 days following the incurrence and not this clause (xiv) for purposes of determining amounts outstanding under such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect clauses (iv) and (xx) of the Senior Credit Facilitiesthis Section 4.03(b); and provided, such Notesfurther, NXP Notes or Existing Secured Note, or Refinancing Indebtedness that subclause (1) of any of the foregoing, as applicable, and
this clause (Dxiv) shall not include:apply to any refunding, refinancing or defeasance of (A) the Notes or (B) any Secured Indebtedness;
(ixv) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiary Subsidiaries or merged or amalgamated into the Company Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided provided, however, that such Indebtedness, Disqualified Stock or Preferred Stock is not Incurred in contemplation of such acquisition, merger or amalgamation; provided, further, however, that after giving effect to such acquisition, merger or amalgamation amalgamation, either:
(A1) the Company Issuer would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Debt to Adjusted EBITDA Ratio test set forth in Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Debt to Adjusted EBITDA Ratio of the Company and the Restricted Subsidiaries is Issuer would be less than or equal to or greater than such ratio immediately prior to such acquisition, merger or amalgamation;
(15xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse (except for Standard Securitization Undertakings) to the Issuer or any Restricted Subsidiary other than a Receivables Subsidiary;
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five Business Days of its incurrenceIncurrence;
(16xviii) Indebtedness of the Company Issuer or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the any Credit FacilitiesAgreement, in a principal amount not in excess of the stated amount of such letter of creditcredit or bank guarantee;
(17xix) Contribution Indebtedness;
(Axx) any guarantee by Indebtedness of Restricted Subsidiaries that are not Guarantors; provided, however, that the Company or a Restricted Subsidiary aggregate principal amount of Indebtedness Incurred under this clause (xx), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), does not exceed the greater of (x) $75.0 million and (y) 10% of the Total Assets of the Restricted Subsidiaries of Intelsat Subholdco that are not guarantors of any Indebtedness of the Issuer;
(xxi) Indebtedness of the Issuer or other obligations of any Restricted Subsidiary so long consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and
(xxii) Indebtedness of the Issuer or any of the Restricted Subsidiaries incurred to repurchase or refinance any Specified Existing PanAmSat Notes.
(c) For purposes of determining compliance with this Section, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of one or more of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (i) through (xxii) above or is entitled to be Incurred pursuant to Section 4.03(a), the Issuer shall, in its sole discretion divide, classify or reclassify or later divide, classify or reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock in any manner that complies with this Section and such item of Indebtedness, Disqualified Stock or Preferred Stock shall be treated as the incurrence having been Incurred pursuant to one or more of such clauses or pursuant to Section 4.03(a); provided that all Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orCredit Agreements outstanding on the Issue Date shall be deemed to have been Incurred pursuant to Section
Appears in 1 contract
Sources: Indenture (Intelsat LTD)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Company shall not permit any of its Restricted Subsidiary Subsidiaries (other than a Guarantor) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of the Company for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $750 million outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus ;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereofIncurrence by the Company, the aggregate amount of fees, underwriting discounts, premiums Floating Rate Guarantors and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence by the Issuer and any Guarantor Guarantors of Indebtedness represented by the Notes Floating Rate Loan, the Floating Rate Guarantees, the Original Securities (not including any Additional NotesSecurities) and the Guarantees, as applicable (including the Exchange Securities and guarantees thereof), including any Guarantee of the Notes;
(3iii) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b));
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company or any of its Restricted Subsidiaries, Subsidiaries to finance (whether prior to or within 270 days after) the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and Indebtedness then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed the greater of $75.0 million and 4.0% of Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtednesscredit, such obligations are reimbursed within 30 days following such drawing or incurrencedrawing;
(6vi) Indebtedness arising from agreements of the Company or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the Acquisition or any other acquisition or disposition of any business, assets or a SubsidiarySubsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing owed to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notesobligations of the Company under the Securities; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence Incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary lending such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into that are not incurred for speculative purposes: (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases or sales;
(11xi) obligations in respect of performance, bid, appeal bid and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferenceamount, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed $100 million at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Indebtedness Incurred under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which the Company, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii));
(xiii) any guarantee by the Company or a Guarantor of Indebtedness or other obligations of the Company or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by the Company or such Restricted Subsidiary could have incurred is permitted under the terms of this Indenture; provided that if such IndebtednessIndebtedness is by its express terms subordinated in right of payment to the Securities or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of such Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantor’s Guarantee with respect to the Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by of a Restricted Subsidiary of the Company which serves to refund, refinance or defease any Restricted Subsidiary, of Indebtedness, Indebtedness Incurred or Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred issued as permitted under Section 4.09(a4.03(a) hereof and clauses (2ii), (3iii), (4iv), (xv), (xix) and (12)(axx) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock Stock, including additional any Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,refinanced and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date one year following the last maturity date of any Securities then outstanding were instead due on such date one year following the last date of maturity of the Securities;
(B2) has a Stated Maturity which is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or (y) one year following the last maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (ia) Indebtedness subordinated or pari passu junior to the Notes Securities or any the Guarantee thereofof such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes Securities or the Guarantee at least to the same extent of such Restricted Subsidiary, as the Indebtedness being refinanced or refunded applicable, or (iib) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,;
(C4) is Incurred in an aggregate amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium, fees and expenses Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is not a Guarantor that refinances Indebtedness of the Company or a Restricted Subsidiary that is a Guarantor, or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(6) in the case of any Refinancing Indebtedness in respect Incurred to refinance Indebtedness outstanding under clause (iv), (xix) or (xx) of Indebtedness under the Senior Credit Facilitiesthis Section 4.03(b), the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required deemed to have been Incurred and to be incurred substantially contemporaneously with the related refinancing outstanding under such clause (iv), (xix) or (xx) of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoingthis Section 4.03(b), as applicable, within 45 days following the incurrence and not this clause (xiv) for purposes of determining amounts outstanding under such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect clauses (iv), (xix) and (xx) of the Senior Credit Facilitiesthis Section 4.03(b); provided, such Notesfurther, NXP Notes or Existing Secured Note, or Refinancing Indebtedness that subclauses (1) and (2) of any of the foregoing, as applicable, and
this clause (Dxiv) shall not include:apply to any refunding or refinancing of the Securities or any Senior Indebtedness.
(ixv) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any of its Restricted Subsidiary Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided provided, however, that such Indebtedness, Disqualified Stock or Preferred Stock is not Incurred in contemplation of such acquisition or merger or to provide all or a portion of the funds or credit support required to consummate such acquisition or merger; provided, further, however, that after giving effect to such acquisition, merger or amalgamation acquisition and the Incurrence of such Indebtedness either:
(A1) the Company would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in the first sentence of Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or would be greater than immediately prior to such acquisition, merger or amalgamation;
(15xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five two Business Days of its incurrenceIncurrence;
(16xviii) Indebtedness of the Company or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit issued pursuant to the Credit FacilitiesAgreement, in a principal amount not in excess of the stated amount of such letter of credit;
(17xix) Contribution Indebtedness;
(Axx) any guarantee by Indebtedness of Restricted Subsidiaries that are not Guarantors Incurred for working capital purposes, provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (xx), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), does not exceed the greater of $15 million and 10% of the consolidated assets of the Restricted Subsidiaries that are not Guarantors; and
(xxi) Indebtedness of the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as consisting of (x) the incurrence financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business.
(c) For purposes of determining compliance with this Section 4.03, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xxi) above or is entitled to be Incurred pursuant to Section 4.03(a), the Company shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness in any manner that complies with this Section 4.03; provided that all Indebtedness under the Credit Agreement outstanding on the Issue Date shall be deemed to have been Incurred pursuant to clause (i) of Section 4.03(b) and the Company shall not be permitted to reclassify all or any portion of such Indebtedness incurred under the Credit Agreement outstanding on the Issue Date. Accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.03. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such Restricted Subsidiary guarantee or letter of credit, as the case may be, was in compliance with this Section 4.03.
(d) For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt; provided that if such Indebtedness is permitted under the terms of this IndentureIncurred to refinance other Indebtedness denominated in a foreign currency, orand such
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently contingently, or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, provided that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis for the Company Issuer and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter periodthe most recently ended four fiscal quarters for which internal financial statements are available; provided, further, that the amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors shall not (together with any Refinancing Indebtedness in respect thereof) exceed $125.0 million at any one time outstanding.
(b) The provisions of subsection (a) of this Section 4.09(a) hereof 4.09 shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof); provided that immediately after giving effect to any such incurrence, and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an the then outstanding aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any all Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (does not including any Additional Notes), including any Guarantee of the Notes;
(3) Indebtedness of the Company, the Issuer and their Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Company or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any one time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect an amount equal to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) $3,300.0 million and (b) an additional amount of Secured Indebtedness or Disqualified Stock of provided that the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), Consolidated Secured Debt Ratio does not at any one time outstanding exceed $900.0 million 4.25 to 1.00 (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving pro forma effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under and the terms application of this Indenture, orthe net
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (ai) The Company Hexion shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock and will (ii) Hexion shall not permit any of its Restricted Subsidiary Subsidiaries (other than a Guarantor) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Hexion and any Restricted Subsidiary may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of Hexion for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by Hexion or its Restricted Subsidiaries of Indebtedness under any Credit Facilities by the Company, the Issuer Agreement or any other Restricted Subsidiary ABL Facility and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), ) (including any Indebtedness Incurred and represented by the Notes or any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, other First Priority Lien Obligations) up to an aggregate principal amount of $2.175 billion plus an aggregate additional principal amount of Consolidated Total Indebtedness constituting First Priority Lien Obligations or ABL Obligations outstanding at any one time, when taken together with time that does not cause the aggregate principal amount Consolidated Secured Debt Ratio of Hexion to exceed 3.75 to 1.00 determined on a pro forma basis (or, if issued with original issue discount, including a pro forma application of the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus net proceeds therefrom);
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer and any Guarantor the Guarantors of Indebtedness represented by the Initial Existing First Lien Notes (not including any Additional Notes), including any Guarantee of and the Notesrelated guarantees thereof;
(3iii) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or (after giving effect to the Merger Date Offering Transactions) (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b)), including the Existing Debentures and the Existing Junior Priority Notes and the guarantees thereof;
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company Hexion or any of its Restricted Subsidiaries, Subsidiaries to finance (whether prior to or within 270 days after) the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and Indebtedness then outstanding under that was Incurred (or deemed Incurred pursuant to clause (xiv) below) pursuant to this clause (4iv), does not to exceed 4.0the greater of $150.0 million and 5.0% of Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company Hexion or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtednesscredit, such obligations are reimbursed within 30 days following such drawing or incurrencedrawing;
(6vi) Indebtedness arising from agreements of the Company Hexion or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the disposition of any business, assets or a SubsidiarySubsidiary of Hexion in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that
(A) , at the time of closing, the amount of such Indebtedness is not reflected on determinable and, to the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all extent such Indebtedness shall at no time exceed thereafter becomes fixed and determined, the gross 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 by the Company and its Restricted Subsidiaries in connection with such dispositionIndebtedness is paid within 60 days thereafter;
(7vii) Indebtedness of the Company Hexion to a Restricted Subsidiary; provided provided, however, that any such Indebtedness owing owed to a Restricted Subsidiary that is not the Issuer or a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notesobligations of Hexion under its Guarantee; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedfurther, in each casehowever, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to Hexion or another Restricted Subsidiary; provided, however, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Hexion or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to Hexion or another Restricted Subsidiary; provided, however, that if a Guarantor Subsidiary Incurs such Indebtedness to a Restricted Subsidiary that is not the Issuer or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further, however, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into that are not Incurred for speculative purposes: (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases;
(11xi) obligations in respect of performance, bid, appeal bid and surety bonds, including surety bonds issued in respect of workers’ compensation claims, and completion guarantees provided by the Company Hexion or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock Hexion or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which as applicable, which, when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed the greater of $150.0 million and 5.0% of Total Assets at any one the time outstanding exceed $900.0 million of Incurrence (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Indebtedness Incurred under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which Hexion, or the Company or such Restricted Subsidiary Subsidiary, as the case may be, could have incurred Incurred such Indebtedness, Disqualified Stock or Preferred Stock Indebtedness under Section 4.09 (a4.03(a) hereof without reliance on upon this clause (12)(bxii));
(13xiii) the incurrence any guarantee by the Company Hexion or any of its Restricted Subsidiaries of Indebtedness or other obligations of Hexion or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by Hexion or such Restricted Subsidiary is permitted under the terms of this Indenture; provided, however, that if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of Indebtednessany Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantor’s Guarantee with respect to the Notes substantially to the same extent as such Indebtedness is subordinated to the Notes or the Guarantee of such Guarantor, Disqualified Stock as applicable;
(xiv) the Incurrence by Hexion or Preferred Stock any of its Restricted Subsidiaries of Indebtedness which serves to refund refund, refinance or refinance defease any Indebtedness, Disqualified Stock or Preferred Stock incurred Indebtedness Incurred as permitted under Section 4.09(a4.03(a) hereof and clauses (2ii), (3iii), (4iv), (xiv), (xv) and and/or (12)(axix) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Indebtedness Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtednessincluding, Disqualified Stock or Preferred Stock incurred in each case, any Indebtedness Incurred to pay premiums (including reasonable tender premiums), expenses, defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity); provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity ofof the Indebtedness being refunded, refinanced or defeased and (y) the Indebtedness, Disqualified Stock or Preferred Stock Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness being refunded or refinanced,refinanced that were due on or after the date one year following the last maturity date of any Notes then outstanding were instead due on such date one year following;
(B2) has a Stated Maturity which is no earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or (y) one year following the last maturity date of any Notes then outstanding;
(3) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes or the Guarantee at least of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the same extent Notes or the Guarantee of such Restricted Subsidiary, as applicable;
(4) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium, expenses, costs and fees Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of Hexion that is not a Guarantor that refinances Indebtedness of Hexion or refunded another Guarantor (unless such Restricted Subsidiary is an obligor with respect to such Indebtedness being refinanced), or (iiy) Disqualified Stock Indebtedness of Hexion or Preferred Stock, such Refinancing a Restricted Subsidiary that refinances Indebtedness must be Disqualified Stock or Preferred Stock, respectively,of an Unrestricted Subsidiary; and
(C6) in the case of any Refinancing Indebtedness in respect Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of Indebtedness under the Senior Credit Facilitiesthis Section 4.03(b), the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required deemed to have been Incurred and to be incurred substantially contemporaneously with the related refinancing outstanding under such clause (iv) or (xx) of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoingthis Section 4.03(b), as applicable, within 45 days following the incurrence and not this clause (xiv) for purposes of determining amounts outstanding under such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect clauses (iv) and (xx) of the Senior Credit Facilitiesthis Section 4.03(b); provided further, such Noteshowever, NXP Notes or Existing Secured Notethat subclauses (1), or Refinancing Indebtedness (2) and (3) of any of the foregoing, as applicable, and
this clause (Dxiv) shall not include:
apply to any refunding or refinancing of (iA) Indebtednessthe Notes, Disqualified Stock (B) any Secured Indebtedness constituting a First Priority Lien Obligation or Preferred Stock ABL Obligation or (C) any Existing Debentures consisting of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuerpollution control bonds;
(iixv) Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Hexion or any of its Restricted Subsidiary incurred Subsidiaries Incurred to finance an acquisition or (y) Persons that are acquired by the Company Hexion or any of its Restricted Subsidiary Subsidiaries or merged with or amalgamated into the Company Hexion or a Restricted Subsidiary in accordance with the terms of this Indenture; provided provided, however, that after giving effect to such acquisition, merger or amalgamation acquisition and the Incurrence of such Indebtedness either:
(A1) the Company Hexion would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or would be greater than immediately prior to such acquisition, merger or amalgamation;
(15xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to Hexion or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, provided however, that such Indebtedness is extinguished within five Business Days of its incurrenceIncurrence;
(16xviii) Indebtedness of the Company Hexion or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit FacilitiesAgreement, in a principal amount not in excess of the stated amount of such letter of credit;
(17xix) Contribution Indebtedness;
(Axx) Indebtedness of Foreign Subsidiaries of Hexion for working capital purposes or any guarantee other purposes; provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (xx) other than for working capital purposes, when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), does not exceed the greater of $150 million and 5.0% of Total Assets at the time of Incurrence;
(xxi) Indebtedness of Hexion or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take or pay obligations contained in supply arrangements, in each case, entered into in the ordinary course of business;
(xxii) Indebtedness Incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of Hexion or any Restricted Subsidiary not in excess, at any one time outstanding, of $7.5 million; and
(xxiii) Indebtedness issued by the Company Hexion or a Restricted Subsidiary to current or former officers, directors and employees thereof or any direct or indirect parent thereof, or their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of Hexion or any of its direct or indirect parent companies to the extent permitted under clause (iv) of the covenant described under Section 4.04(b).
(c) For purposes of determining compliance with this Section 4.03, (A) Indebtedness need not be Incurred solely by reference to one category of permitted Indebtedness described in clauses (i) through (xxiii) above or pursuant to Section 4.03(a) but is permitted to be Incurred in part under any combination thereof and (B) in the event that an item of Indebtedness (or other obligations any portion thereof) meets the criteria of one or more of the categories of permitted Indebtedness described in clauses (i) through (xxiii) above or is entitled to be Incurred pursuant to Section 4.03(a), Hexion shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness (or any Restricted Subsidiary so long as portion thereof) in any manner that complies with this Section 4.03 and will only be required to include the incurrence amount and type of such item of Indebtedness incurred by (or any portion thereof) in one of the above clauses and such Restricted Subsidiary is permitted item of Indebtedness will be treated as having been Incurred pursuant to only one of such clauses or pursuant to Section 4.03(a); provided, however, that all Indebtedness under the terms of this Indenture, orExisting First Lien Notes outstanding on the Issue Date (other than the Initial Existing First Lien Notes) and the Notes issued on the Issue Date and any Exchange Notes in respect thereof shall be deemed at all times to have been incurred pursuant to Section 4.03(b)(i) and all Indebtedness under the Initial Existing First Lien Notes outstanding on the Issue Dat
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Sources: Indenture (Hexion Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock, and the Issuer will not permit any of its Restricted Subsidiary Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuers and any Subsidiary Guarantor may incur Incur unsecured or Junior Lien Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and any Subsidiary Guarantor may issue shares of Preferred Stock, in each case if the Fixed Charge Interest Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available Required Financial Statements have been delivered immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 is 2.25 to 1.00 or greater (the “Fixed Charge Coverage TestRatio Debt”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of the proceeds therefrom had occurred occurred, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof shall foregoing limitations will not apply to:to (collectively, “Permitted Debt”):
(1i) the incurrence Incurrence by the Issuers and the Subsidiary Guarantors of Indebtedness pursuant to one or more Credit Agreements up to an aggregate outstanding principal amount, including all Indebtedness incurred to Refinance any Indebtedness originally Incurred pursuant to this clause (i) (and any successive Refinancing Indebtedness), not to exceed an amount equal to the Issue Date Extended Term Loan Amount plus, solely in the event the Call Right is exercised, an amount equal to the aggregate principal amount of the Third Lien Notes and Notes redeemed in connection therewith (plus unpaid accrued interest and premium (including interest previously paid in kind and tender premiums) thereon and underwriting discounts, defeasance costs, fees, commissions and expenses) in connection with any Refinancings less the amount applied to permanently repay Indebtedness incurred under Credit Facilities this clause (i) pursuant to Section 3.7;
(ii) the Incurrence by the Company, Issuers and the Issuer or any other Restricted Subsidiary Guarantors of Indebtedness pursuant to the ABL Credit Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate outstanding principal amount outstanding at amount, including all Indebtedness incurred to Refinance any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus Indebtedness originally Incurred pursuant to this clause (ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee of the Notes;
(3) Indebtedness of the Company, the Issuer and their Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Company or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any successive Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchasean amount equal to $1,000.0 million (plus unpaid accrued interest and premium (including tender premiums) thereon and underwriting discounts, lease or improvement or is created within 270 days thereafter;
(5defeasance costs, fees, commissions and expenses) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with any Refinancings less the disposition of any business, assets or a Subsidiary, other than guarantees of amount applied to permanently repay Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, thatunder this clause (ii) pursuant to Section 3.7;
(A) such Indebtedness is not reflected (1) the Incurrence by the Issuers of the Notes issued on the balance sheet of the Company or any of its Restricted Subsidiaries Issue Date and PIK Notes issued in respect thereof (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability PIK Notes issued in respect of all such Indebtedness shall at no time exceed PIK Notes) and the gross 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 Incurrence by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness Subsidiary Guarantors of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment Guarantees related to the foregoing Notes and PIK Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
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Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company shall not, and shall not permit any of its the Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Company shall not permit any of the Restricted Subsidiary Subsidiaries (other than a Note Guarantor) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and any Restricted Subsidiary may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of the Company for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by the Company or the Restricted Subsidiaries of Indebtedness (including under any Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), ) and any Refinancing Indebtedness in respect thereof represented by the Notes and Guarantees in respect of such Indebtedness, the Note Guarantees) up to an aggregate principal amount outstanding at any one time, when taken together with of:
(1) the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, sum of (ix) $5,250.0 million, plus 300 million and (ii) €750.0 million, plus (iiiy) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereofan ABL Facility, the aggregate amount by which the Borrowing Base (calculated on a pro forma basis) exceeds $300 million at the time of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;incurrence; plus
(2) the incurrence by sum of (x) $1,200 million and (y) an aggregate additional principal amount of Consolidated Total Indebtedness constituting First Priority Lien Obligations outstanding at any one time that does not cause the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee Consolidated Secured Debt Ratio of the NotesCompany to exceed 3.75 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom);
(3ii) [Reserved];
(iii) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b)), including the Junior Notes and the guarantees thereof;
(4a) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company or any of its the Restricted Subsidiaries, Disqualified Stock issued by the Company or any of the Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries to finance (whether prior to or within 270 days after) the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) and (b) Acquired Indebtedness; in an aggregate principal amountamount that, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued and then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed 4.0the greater of $150.0 million and 5.0% of Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company or any of its the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the any acquisition or disposition of any business, assets or a SubsidiarySubsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing owed to a Restricted Subsidiary that is not a Note Guarantor (other than the Issuer) is expressly subordinated in right of payment to the obligations of the Company under the Notes; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence Incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Note Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is not a Note Guarantor, such Indebtedness is subordinated in right of payment to the Note Guarantee of such Note Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into that are not Incurred for speculative purposespurposes and are either: (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases or sales;
(11xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds, including surety bonds issued in respect of workers’ compensation claims, and completion guarantees provided by the Company or any of its Restricted Subsidiaries Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(12) (axii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, as applicable, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed the greater of $150.0 million and 5.0% of Total Assets at the time of Incurrence (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a) from and after the first date on which the Company, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii));
(xiii) any guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness or other obligations of the Company or any of the Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by the Company or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of such Note Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Note Guarantor’s Note Guarantee with respect to the Notes substantially to the same extent as such Indebtedness is subordinated to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary that serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(a) and clauses (ii), (iii), (iv), (xiv), (xv), and/or (xx) of this Section 4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including, in each case, any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums), expenses, defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”); provided, however, that such Refinancing Indebtedness:
(1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date one year following the maturity date of any Notes then outstanding were instead due on such date one year following the maturity date of such Notes;
(2) has a Stated Maturity which is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or defeased or (y) 91 days following the maturity date of the Notes;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;
(4) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium, expenses, costs and fees Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary that is not a Note Guarantor that refinances Indebtedness of the Company or a Restricted Subsidiary that is a Note Guarantor (unless such Restricted Subsidiary is an obligor with respect to such Indebtedness being refinanced), or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(6) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xx) of this Section 4.03(b); provided, further, that subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of (A) the Notes and (B) any Indebtedness constituting First Priority Lien Obligations.
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or any of the Restricted Subsidiaries Incurred to finance an acquisition or (y) Persons that are acquired by the Company or any of the Restricted Subsidiaries or merged or amalgamated with or into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving effect to such acquisition, merger or amalgamation and the Incurrence of such Indebtedness either:
(1) the Company would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of Section 4.03(a); or
(2) the Fixed Charge Coverage Ratio would be equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company or any Restricted Subsidiary equal other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five Business Days of its Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to 200.0any Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference not exceeding at any time outstanding 200% of the net cash proceeds received by the Company and the Restricted Subsidiaries since immediately after the Transaction Issue Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies entity of the Company (which proceeds are contributed to the Company or a Restricted Subsidiary) or cash contributed to the capital of the Company (in each case, case other than proceeds of Disqualified Stock or sales of Equity Interests to to, or contributions received from, the Company or any of its Subsidiaries) ), as determined in accordance with clauses (3)(BB) and (3)(CC) of Section 4.07(a) hereof the definition of Cumulative Credit, to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b4.04(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and );
(bxx) Indebtedness of Foreign Subsidiaries for working capital purposes or Disqualified Stock any other purposes; provided, however, that the aggregate principal amount of the Company and IndebtednessIndebtedness Incurred under this clause (xx), Disqualified Stock or Preferred Stock of the Company or, subject other than for working capital purposes (up to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferenceoutstanding not to exceed $100,000,000), which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock Indebtedness then outstanding and incurred Incurred pursuant to this clause (12)(bxx), does not exceed the greater of $150.0 million and 5.0% of Total Assets at any one the time outstanding exceed $900.0 million of Incurrence (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Indebtedness Incurred under this clause (12) (bxx) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxx) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The (i) the Company shall not, and shall not permit any of its the Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Company shall not permit any of the Restricted Subsidiary Subsidiaries (other than any Guarantor) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and any Guarantor may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary that is not a Guarantor may incur Incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and or issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of the Company for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided, that the amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors, together with all Indebtedness, Disqualified Stock or Preferred Stock Incurred by Restricted Subsidiaries that are not Guarantors pursuant to Section 4.03(b)(xii) and (xvi)(A) below, together with any Refinancing Indebtedness in respect thereof, shall not exceed, in the aggregate, the greater of $75 million and 60% of Consolidated EBITDA as of the date on which such Indebtedness is Incurred (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount).
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by the Company or any Restricted Subsidiary of Indebtedness (including under any Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, thereunder) up to an aggregate principal amount outstanding at any one timethe time of Incurrence that, when taken together with the aggregate principal amount of Indebtedness outstanding under clause (orq) below at the time of Incurrence, if issued with original issue discount, does not exceed an amount equal to the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (ix) $5,250.0 million, plus 515.0 million and (y) the Borrowing Base;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer Company and any Guarantor the other Guarantors of Indebtedness represented by the Initial Notes (not including any Additional Notes), including any Guarantee of and the NotesGuarantees;
(3iii) Indebtedness of the CompanyIndebtedness, the Issuer Preferred Stock and their Subsidiaries in existence Disqualified Stock existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b));
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company or any of its Restricted SubsidiariesSubsidiary, Disqualified Stock issued by the Company or any Restricted Subsidiary and Preferred Stock issued by any Restricted Subsidiary to finance (whether prior to or within 270 days after) the purchaseacquisition, lease lease, construction, repair, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate assets) that, when aggregated with the principal amountamount or liquidation preference of all other Indebtedness, Disqualified Stock or Preferred Stock then outstanding and Incurred pursuant to this clause (iv), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) below, does not exceed at any one time outstanding the greater of $55 million and all other 40% of Consolidated EBITDA as of the date such Indebtedness is Incurred (plus, in the case of any Refinancing Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4the Additional Refinancing Amount), not to exceed 4.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5v) Indebtedness incurred Incurred by the Company or any of its Restricted Subsidiaries Subsidiary constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental law or permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company or its any Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of acquisition or purchase price, earnouts price or similar obligationsobligations (including earn-outs), in each case, incurred Incurred or assumed in connection with the Transactions, any Investments or any acquisition or disposition of any business, assets or a SubsidiarySubsidiary not prohibited by this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company to a Restricted Subsidiary; , provided that (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of the Company and their Subsidiaries) any such Indebtedness owing owed to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the obligations of the Company under the Notes; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to any pledge of such Indebtedness constituting a Permitted Lien but not the Company or another Restricted Subsidiarytransfer thereof upon foreclosure) shall be deemed, in each case, to be an incurrence Incurrence of such IndebtednessIndebtedness not permitted by this clause (vii);
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred StockStock not permitted by this clause (viii);
(10ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of the Company and their Subsidiaries), such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (ix);
(x) Hedging Obligations (excluding Hedging Obligations entered into that are not incurred for speculative purposespurposes but (A) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (C) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases or sales and, in each case, extensions or replacements thereof;
(11xi) obligations (including reimbursement obligations with respect to letters of credit, bank guarantees, warehouse receipts and similar instruments) in respect of performance, bid, appeal and surety bonds and bonds, completion guarantees and similar obligations provided by the Company or any of its Restricted Subsidiaries Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(12) (axii) Indebtedness or Disqualified Stock of the Company and or Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), together with any Refinancing Indebtedness in respect thereof incurred pursuant to clause (xv) below, does not exceed at any one time outstanding exceed the greater of $900.0 100.0 million and 80% of Consolidated EBITDA as of the date such Indebtedness is Incurred (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount) (it being understood that any Indebtedness Incurred pursuant to this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a) from and after the first date on which the Company, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii)); provided, that the amount of Indebtedness, Disqualified Stock and Preferred Stock that may be Incurred or issued, as applicable, pursuant to this clause (xii) by Restricted Subsidiaries that are not Guarantors, together with all Indebtedness, Disqualified Stock or Preferred Stock Incurred by Restricted Subsidiaries that are not Guarantors pursuant to the first paragraph of this covenant or clause (xvi)(A) below, and any Refinancing Indebtedness of Restricted Subsidiaries that are not Guarantors incurred in respect thereof, shall not exceed, in the aggregate, the greater of $75 million and 60% of Consolidated EBITDA (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);
(xiii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary in an aggregate principal amount or liquidation preference at any time outstanding, together with Refinancing Indebtedness in respect thereof incurred pursuant to clause (xv) hereof, not greater than 100.0% of the net cash proceeds received by the Company and the Restricted Subsidiaries since immediately after the Issue Date from the issue or sale of Equity Interests of the Company or any direct or indirect parent entity of the Company (which proceeds are contributed to the Company or a Restricted Subsidiary) or cash contributed to the capital of the Company (in each case other than proceeds of Disqualified Stock or sales of Equity Interests to, or contributions received from the Company or any of their Subsidiaries) to the extent such net cash proceeds or cash have not been applied to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.04(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount) (it being understood that any Indebtedness incurred pursuant to this clause (12) (bxiii) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(bxiii) but shall be deemed incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which the Company Company, or such the Restricted Subsidiary Subsidiary, as the case may be, could have incurred such Indebtedness, Disqualified Stock or Preferred Stock Indebtedness under Section 4.09 (a4.03(a) hereof without reliance on upon this clause (12)(bxiii));
(13xiv) the incurrence any guarantee by the Company or any Restricted Subsidiary of Indebtedness or other obligations of the Company or any Restricted Subsidiary so long as the Incurrence of such Indebtedness Incurred by the Company or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that (A) if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee with respect to such Indebtedness shall be subordinated in right of Indebtednesspayment to the Notes or such Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Notes or the Guarantee, as applicable, and (B) if such guarantee is of Indebtedness of the Company, such guarantee is Incurred in accordance with, or not in contravention of, Section 4.11 solely to the extent Section 4.11 is applicable;
(xv) the Incurrence by the Company or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock, or by any Restricted Subsidiary of Preferred Stock of a Restricted Subsidiary, that serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock which serves issued as permitted under Section 4.03(a) and clauses (i)(y), (ii), (iii), (iv), (xii), (xiii), (xv), (xvi) and (xx) of this Section 4.03(b) up to refund the outstanding principal amount (or, if applicable, the liquidation preference, face amount, or refinance any Indebtednessthe like) or, if greater, committed amount (only to the extent the committed amount could have been Incurred on the date of initial Incurrence and was deemed Incurred at such time for the purposes of this Section 4.03) of such Indebtedness or Disqualified Stock or Preferred Stock, in each case at the time such Indebtedness was Incurred or Disqualified Stock or Preferred Stock incurred as permitted under was issued pursuant to Section 4.09(a4.03(a) hereof and or clauses (2i)(y), (3ii), (4iii), (iv), (xii), (xiii), (xv), (xvi) and (12)(axx) of this Section 4.09(b4.03(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including Stock, plus any additional Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), accrued and unpaid interest, expenses, defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced,refinanced that were due on or after the date that is one year following the last maturity date of any Notes then outstanding were instead due on such date (provided that this subclause (1) will not apply to any refunding or refinancing of any Secured Indebtedness);
(B2) to the extent such Refinancing Indebtedness refinances (ia) Indebtedness subordinated or pari passu junior to the Notes or any Guarantee thereofa Guarantee, as applicable, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes or the Guarantee at least to the same extent Guarantee, as the Indebtedness being refinanced or refunded applicable, or (iib) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,;
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D3) shall not include:
include (ix) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of a Restricted Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of the Company or the Issuer;
a Guarantor, or (iiy) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of an Unrestricted Subsidiary;
(14xvi) Indebtedness, Disqualified Stock or Preferred Stock of (xA) the Company or, subject to Section 4.09 (c) hereof, a or any Restricted Subsidiary incurred to finance an acquisition or (yB) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
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Sources: Indenture (XPO Logistics, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall Holdings will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or any Restricted Subsidiary that is not a Guarantor to issue Preferred Stock; provided, provided that the Company Holdings may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and any Restricted Subsidiary that is not a Guarantor may issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for Holdings and the Company and its Restricted SubsidiariesSubsidiaries for Holdings’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided that the then outstanding aggregate principal amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to this paragraph (plus any Refinancing Indebtedness in respect thereof) by Restricted Subsidiaries that are not Guarantors shall not exceed 4.0% of Consolidated Total Assets (in each case, determined on the date of such incurrence).
(b) The provisions of Section 4.09(a9.7(a) hereof shall not apply to:
(1) the incurrence of Indebtedness under pursuant to Credit Facilities by the Company, the Issuer Holdings or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the undrawn face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with ; provided that the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any such Indebtedness permitted under outstanding pursuant to this clause (1) or any portion thereofwithout duplication, does not exceed an amount equal to the aggregate amount greater of fees, underwriting discounts, premiums (a) $350.0 million and other costs and expenses Incurred in connection with (b) the Borrowing Base at the time such refinancingdebt is incurred;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes arising under this Agreement (not including any Additional NotesGuarantee), including any Guarantee of the Notes;
(3) Indebtedness of the Company, the Issuer Borrower and their Subsidiaries any Restricted Subsidiary in existence on the Issue Date or the Merger Closing Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b)9.7(b) outstanding on the Closing Date);
(4) Indebtedness (including Capitalized Lease Obligations and Purchase Money Obligations), ) and Disqualified Stock incurred or issued by Holdings or any Restricted Subsidiary and Preferred Stock incurred issued by the Company or any of its Restricted SubsidiariesSubsidiary, to finance the purchase, restoration, lease or improvement of property (real or personal) ), equipment or equipment other assets, including assets that is are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all incurred to refinance any other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding Indebtedness incurred under this clause (4), not to exceed 4.0the greater of (a) $35.0 million and (b) 2.25% of Consolidated Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred by the Company Holdings or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, bank guarantees, workers’ compensation claims, self-insurance obligations, bankers’ acceptances, warehouse receipts, guarantees, statutory, export or import indemnities, customs, revenue bonds or similar instruments issued or created, including letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; provided, provided that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days Business Days following such drawing or incurrence;
(6) Indebtedness of Holdings to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not the Borrower or a Subsidiary Guarantor is subordinated in right of payment to the Guarantee of the Notes by Holdings (for the avoidance of doubt, any such Indebtedness owing to a Restricted Subsidiary that is not the Borrower or a Subsidiary Guarantor shall be deemed to be expressly subordinated in right of payment to the Guarantee of the Notes by Holdings unless the terms of such Indebtedness expressly provide otherwise); provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause (6);
(7) Indebtedness of a Restricted Subsidiary to Holdings or another Restricted Subsidiary; provided that if the Borrower or a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not the Borrower or a Subsidiary Guarantor, such Indebtedness is subordinated in right of payment to the Loans or the Guarantee of the Loans of such Subsidiary Guarantor, as applicable (for the avoidance of doubt, any such Indebtedness owing to a Restricted Subsidiary that is not the Borrower or a Subsidiary Guarantor shall be deemed to be expressly subordinated in right of payment to the Loans or the Guarantee of the Loans, as applicable, unless the terms of such Indebtedness expressly provide otherwise); provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause (7);
(8) shares of Preferred Stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to Holdings or another of its Restricted Subsidiaries or any pledge of such Capital Stock constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an issuance of such shares of Preferred Stock not permitted by this clause (8);
(9) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) and Permitted Bank Product Obligations;
(10) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, the issuance by Holdings or any Restricted Subsidiary of Disqualified Stock or the issuance by any Restricted Subsidiary of Preferred Stock which serves to extend, replace, refund, refinance, renew or defease any Indebtedness incurred or Disqualified Stock or Preferred Stock issued as permitted under the first paragraph of this covenant and clauses (2) and (3) above, this clause (10) and clauses (11), and (16) below or any Indebtedness incurred or Disqualified Stock or Preferred Stock issued to so extend, replace, refund, refinance, renew or defease such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs, accrued interest and fees and expenses in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided that such Refinancing Indebtedness:
(a) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being extended, replaced, refunded, refinanced, renewed or defeased (or requires no or nominal payments in cash prior to the date that is 91 days after the Term Loan Maturity Date);
(b) to the extent such Refinancing Indebtedness extends, replaces, refunds, refinances, renews or defeases (i) Indebtedness subordinated in right of payment to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated in right of payment to the Loans or the Guarantee thereof at least to the same extent as the Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively; and
(c) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of Holdings that is not the Borrower or a Subsidiary Guarantor that refinances Indebtedness or Disqualified Stock of Holdings;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of Holdings that is not the Borrower or a Subsidiary Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Borrower or a Subsidiary Guarantor; or
(iii) Indebtedness or Disqualified Stock of Holdings or Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; and, provided, further, that subclause (a) of this clause (10) will not apply to any extension, replacement, refunding, refinancing, renewal or defeasance of any Credit Facilities or ABL Debt.
(11) (x) Indebtedness or Disqualified Stock of Holdings and Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary, incurred or issued to finance an acquisition (or other purchase of assets) or (y) Indebtedness, Disqualified Stock or Preferred Stock of Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms of this Agreement; provided that in the case of (x) and (y) after giving effect to such acquisition, merger, amalgamation or consolidation, either (a) Holdings would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test or (b) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, amalgamation or merger;
(12) Indebtedness of Holdings or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to Credit Facilities permitted under this Section 9.7, in a principal amount not in excess of the stated amount of such letter of credit;
(13) (a) any guarantee by Holdings or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Agreement, or (b) any guarantee by a Restricted Subsidiary of Indebtedness of Holdings; provided that such guarantee is incurred in accordance with Section 9.13;
(14) (a) Indebtedness consisting of Indebtedness issued by Holdings or any of its Restricted Subsidiaries to future, present or former employees, directors, officers, managers and consultants thereof (including trustees, administrators, executors, powers of attorney, heirs, assignees, estates and beneficiaries), in each case to finance the purchase or redemption of Equity Interests of Holdings to the extent described in Section 9.5(b)(4) or (b) Indebtedness representing deferred compensation to employees of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(15) Indebtedness or Disqualified Stock of Holdings and Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (15), does not at any one time outstanding exceed $25.0 million (in each case, determined on the date of such incurrence); it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (15) shall cease to be deemed incurred or outstanding for purposes of this clause (15) but shall be deemed incurred for the purposes of the first paragraph of this covenant from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under the first paragraph of this covenant without reliance on this clause (15);
(16) Indebtedness or Disqualified Stock of Holdings and Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary in an aggregate principal amount or liquidation preference up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than proceeds of Disqualified Stock, sales of Equity Interests to Holdings or any of its Subsidiaries or Excluded Contributions) as determined in accordance with Section 9.5(a)(3)(b) and Section 9.5(a)(3)(c) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 9.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1), (2) and (3) of the definition thereof);
(17) Indebtedness arising from agreements of Holdings or the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) however, that the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by Holdings and the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(1118) obligations in respect of self-insurance and performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Company Holdings or any of its Restricted Subsidiaries in the ordinary course of businessbusiness or consistent with past practice;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(1519) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, funds; provided that such Indebtedness is extinguished within five ten Business Days of its incurrence;
(1620) Indebtedness of the Company Holdings or any of its Restricted Subsidiaries supported by a letter consisting of credit issued pursuant to (i) the Credit Facilities, financing of insurance premiums or (ii) take-or-pay obligations contained in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orsupply arran
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued Applicable Measurement Period would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof foregoing limitations shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with time not to exceed the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (i) $5,250.0 million, plus 200.0 million and (ii) €750.0 million, plus (iii) in 40.0% of Consolidated EBITDA of the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, Issuer for the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingApplicable Measurement Period;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Guarantee thereof) (other than any Additional Notes, if any, or guarantees with respect thereto), including any Guarantee of the Notes;
(3) Indebtedness incurred pursuant to the Existing Facilities in an aggregate principal amount at any time outstanding not to exceed the maximum amount available under the terms of each Existing Facility as in effect on the Company, Issue Date;
(4) Indebtedness of the Issuer and their the Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1), (2) and (23) of this Section 4.09(b10.11(b));
(45) Indebtedness (including Capitalized Lease Obligations and Purchase Money Obligations), Disqualified Stock and Preferred Stock incurred by the Company Issuer or any of its the Restricted Subsidiaries, Subsidiaries to finance the purchase, lease lease, expansion, construction, development, replacement, maintenance, upgrade, installation, replacement, repair or improvement of property (real or personal) ), equipment or equipment that is used any other asset (including, but not limited to, MSRs, Servicing Advances, mortgages or useful other loans, mortgage-related securities or derivatives, consumer receivables, REO Assets, Residual Interests, mortgage-related receivables or other similar assets (or any interests in a Similar Businessany of the foregoing)), whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstandingassets; so long as provided that the Liens securing such Indebtedness exists may not extend to any other property owned by the Issuer or any of its Restricted Subsidiaries at the date time the Lien is incurred and the Indebtedness secured by the Lien may not be incurred more than 270 days after the latter of the acquisition or completion of the construction of the property subject to the Lien, provided, further that the amount of such purchaseIndebtedness does not exceed the fair market value of the assets developed, lease constructed, purchased, leased, repaired, maintained, expanded, replaced, upgraded, installed or improvement or is created within 270 days thereafterimproved with the proceeds of such Indebtedness;
(5a) Indebtedness incurred by the Company Issuer or any of its the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of businessbusiness or consistent with past practice, including letters of credit in favor of suppliers or trade creditors or in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self‑insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance and (b) Indebtedness of the Issuer or any of its Restricted Subsidiaries as an account party in respect of letters of credit, bank guarantees or similar instruments in favor of suppliers, customers or other creditors issued in the ordinary course of business or consistent with past practice; provided, provided that upon the drawing aggregate principal amount of such letters Indebtedness under this clause (6)(b), when aggregated with the outstanding amount of credit or Indebtedness under clause (17) of this Section 10.11(b) incurred to refinance Indebtedness initially incurred in reliance on this clause (6)(b), shall not exceed at any one time outstanding the incurrence greater of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence(x) $50.0 million and (y) 10.0% of Consolidated EBITDA of the Issuer for the Applicable Measurement Period at any one time outstanding;
(67) Permitted Funding Indebtedness;
(8) Permitted Securitization Indebtedness and Indebtedness under Credit Enhancement Agreements;
(9) Non-Recourse Indebtedness;
(10) Indebtedness arising from agreements of the Company Issuer or its any of the Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts earn-out or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets assets, a Subsidiary or a Subsidiaryan Investment, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(711) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor Guarantor, excluding any Indebtedness in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business or consistent with past practice (other than and not in connection with the Issuer) borrowing of money), is expressly subordinated in right of payment (to the extent permitted by applicable law and it does not result in material adverse tax consequences) to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause;
(12) Indebtedness of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor, excluding any Indebtedness in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business or consistent with past practice (and not in connection with the borrowing of money), such Indebtedness is expressly subordinated in right of payment (to the extent permitted by applicable law and it does not result in material adverse tax consequences) to the Notes or the Guarantee of the Notes of such Guarantor; provided, further, that any subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause;
(13) shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such Preferred Stock or Disqualified Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock or Disqualified Stock (except to the Company Issuer or another Restricted Subsidiary or any pledge of its Restricted Subsidiariessuch Capital Stock constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed in each case to be an issuance of such shares of Preferred Stock or Disqualified Stock, as applicable (to the extent such Preferred Stock or Disqualified Stock is then outstanding), not permitted by this clause;
(1014) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk);
(1115) obligations in respect of self-insurance and obligations in respect of stays, customs, performance, indemnity, bid, appeal appeal, judgment, surety and surety other similar bonds or instruments and performance, bankers’ acceptance facilities and completion guarantees and similar obligations provided by the Company Issuer or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of businessbusiness or consistent with past practice or in connection with judgments that do not result in an Event of Default;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any of its Restricted Subsidiary equal Subsidiaries in an aggregate principal amount or liquidation preference up to 200.0% of the net cash proceeds received by the Company Issuer since immediately after the Transaction Issue Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies Issuer or cash contributed to the capital of the Company Issuer (in each case, other than Excluded Contributions or proceeds of Disqualified Stock or sales of Equity Interests to the Company Issuer or any of its Subsidiaries) as determined in accordance with clauses (3)(B3)(b) and (3)(C3)(c) of Section 4.07(a10.10(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b10.10(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1), (2) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, Issuer or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued pursuant to this clause (12)(b16)(b) and any outstanding amount of Indebtedness under clause (17) of this Section 10.11(b) incurred to refinance Indebtedness initially incurred in reliance on this clause (16)(b), does not at any one time outstanding exceed the greater of (x) $900.0 250.0 million and (y) 50.0% of Consolidated EBITDA of the Issuer for the Applicable Measurement Period (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b16)(b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b16)(b) but shall be deemed incurred for the purposes of pursuant to Section 4.09(a10.11(a) hereof from and after the first date on which the Company Issuer or such Restricted Subsidiary could have incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b10.11(a));
(1317) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or the issuance by the Issuer or any Restricted Subsidiary, Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which that serves to refund refund, refinance, replace, renew, extend, defease, repay, prepay, redeem or refinance retire (collectively, “refinance” with “refinances,” “refinanced” and “refinancing” having a correlative meaning) any Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any of its Restricted Subsidiaries incurred or issued as permitted under Section 4.09(a10.11(a) hereof and clauses (2), (34), (45), (6)(b) and (12)(a) of this Section 4.09(b16), this clause (1317) and clause clauses (1418), (22), (23), (27), (28) and (38) of this Section 4.09(b10.11(b) or any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay accrued but unpaid interest, dividends, premiums (including reasonable tender premiums), defeasance costs, underwriting discounts, fees, costs and expenses (including original issue discount, upfront fees or similar fees) in connection therewith with such refinancing (the “Refinancing Indebtedness”) on or prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded refinanced (or refinancedrequires no or nominal payments in cash (other than interest payments) prior to the date that is 91 days after the maturity date of the Notes),
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu in right of payment to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu in right of payment to the Notes or the such Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,, and
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) include Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of the Company Issuer or the Issuera Guarantor; provided, further, that subclause (A) of this clause (17) shall not apply to any refinancing of any Secured Indebtedness;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(1418) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, Issuer or a Restricted Subsidiary incurred or issued to finance an acquisition or Investment or (y) Persons that are acquired by the Company Issuer or any a Restricted Subsidiary or merged into, amalgamated with or amalgamated into consolidated with the Company Issuer or a Restricted Subsidiary in accordance with the terms of this IndentureIndenture (including designating an Unrestricted Subsidiary as a Restricted Subsidiary); provided that after giving pro forma effect to such Investment, acquisition, merger merger, amalgamation or amalgamation consolidation, either:
(A) the Company Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, 10.11(a); or
(B) the Fixed Charge Coverage Ratio of the Company Issuer and the its Restricted Subsidiaries is equal to or greater than immediately prior to such Investment, acquisition, merger merger, amalgamation or amalgamation;consolidation, provided, however, that on a pro forma basis, no more than the greater of (i) $100.0 million and (ii) 20.0% of Consolidated EBITDA of the Issuer for the Applicable Measurement Period of Indebtedness, Disqualified Stock or Preferred Stock at any one time outstanding and incurred by Restricted Subsidiaries that are not Guarantors pursuant to clause (x) shall be incurred and outstanding.
(15a) Cash Management Obligations, (b) Indebtedness in respect of netting services, overdraft protections and similar arrangements and other Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
or (16c) Indebtedness owed on a short‑term basis of no longer than 30 days to banks and other financial institutions incurred in the ordinary course of business or consistent with past practice of the Company or any of Issuer and its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Sources: Indenture (Mr. Cooper Group Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, provided that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to clause (c) of this Section 4.09(c) hereof4.09, any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for Holdings, the Company and its Restricted SubsidiariesSubsidiaries for Holdings’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 2.0 to 1.00 (the “Fixed Charge Coverage Test”)1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof shall will not apply to:
(1) the incurrence by the Company or any Restricted Subsidiary that is a Guarantor of Indebtedness under pursuant to Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing4,265,000,000;
(2) the incurrence by the Issuer Company and any Subsidiary Guarantor of Indebtedness represented by the Notes issued on the Issue Date and any replacement Notes therefor (not including any Additional Notes), including any Guarantee of the Notesthereof);
(3) Indebtedness of the Company, the Issuer Company and their its Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) (i) Indebtedness (including Capitalized Lease Obligations), ) and Disqualified Stock and Preferred Stock incurred or issued by the Company or any of its Restricted SubsidiariesSubsidiary and Preferred Stock issued by any Restricted Subsidiary, to finance the purchase, lease or improvement of property (real or personal) ), equipment or equipment other assets that is in each case are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and (ii) Indebtedness arising under Capitalized Leases other than those in effect on the Issue Date or entered into pursuant to subclause (i) of this clause (4), in an aggregate principal amount, together with any Refinancing refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or or Preferred Stock incurred or issued and outstanding under this clause (4), not to exceed 4.0the greater of (a) $150,000,000 and (b) 3.0% of Total Assets (in each case, determined at the date of incurrence) at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bank guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or created in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; provided, provided that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts earn-outs or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)Subsidiary Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Subsidiary Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted Subsidiaries) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred StockStock not permitted by this clause (9);
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to under this Section 4.09Indenture, exchange rate risk or commodity pricing risk;
(11) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Company or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal that is a Guarantor in an aggregate principal amount or liquidation preference up to 200.0200% of the net cash proceeds received by the Company since immediately after the Transaction Date May 9, 2012 from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B3)(C) and (3)(C3)(D) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses or, in the case of proceeds received prior to the Issue Date, clause (3)(A) of Section 4.07(a) hereof to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof (or the equivalent provision of the 2019 Notes Indenture) or to make Permitted Investments under the Indenture or the 2019 Notes Indenture (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of thereof in the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes Indenture or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP 2019 Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicableIndenture); provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Sources: Indenture (Sabre Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (ai) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Issuer shall not permit any of its Restricted Subsidiary Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer and any Restricted Subsidiary of the Issuer may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Debt to Adjusted EBITDA Ratio on a consolidated basis of the Issuer for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 be less than or equal to 8.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:to (collectively, “Permitted Debt”):
(1i) the incurrence Incurrence by the Issuer or its Restricted Subsidiaries of Indebtedness under the Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $4.0 billion outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus ;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer and any Guarantor its Restricted Subsidiaries of Indebtedness represented by the Notes (not including any Additional Notes) and the Guarantees, as applicable (and any Exchange Notes and Guarantees thereof), including any Guarantee of the Notes;
(3iii) Indebtedness of the Company, the Issuer and their its Restricted Subsidiaries in existence existing on the Issue Date or Date, including any Indebtedness Incurred on the Merger Issue Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b));
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer to finance (whether prior to or within 270 days after) the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued and then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed 4.0the greater of (x) $450.0 million and (y) 4% of Total Assets at any time outstanding; so long as such Indebtedness exists of the Issuer at the date time of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company Issuer or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the Transactions, any acquisition or disposition of any business, assets or a SubsidiarySubsidiary of the Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the obligations of the Issuer under the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into other than for speculative purposes): (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; or (2) for the purpose of fixing or hedging currency exchange rate risk or commodity pricing riskwith respect to any currency exchanges;
(11xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company Issuer or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) Issuer and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary of the Issuer not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencewhich, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed the greater of (x) $650.0 million and (y) 4% of Total Assets of the Issuer at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Incurred or issued under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which the Company Issuer or such the Restricted Subsidiary Subsidiary, as the case may be, could have incurred Incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a4.03(a) hereof without reliance on upon this clause (12)(bxii));
(13xiii) the incurrence any guarantee by the Company Issuer or a Restricted Subsidiary of Indebtedness or other Obligations of the Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness or other Obligations by the Issuer or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of Indebtednesssuch guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Notes or such Guarantor’s Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Notes or the Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Issuer which serves to refund or refinance or defease any Indebtedness, Indebtedness Incurred or Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a4.03(a) hereof and clauses (2ii), (3iii), (4iv), (xiv), (xv), (xix) and (12)(axx) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock Stock, including additional any Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), expenses, defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded refunded, refinanced or refinanced,defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded, refinanced or defeased that was due on or after the date one year following the last maturity date of any Notes then outstanding were instead due on such date one year following the last date of maturity of any Notes then outstanding;
(B2) to the extent such Refinancing Indebtedness refinances (ia) Indebtedness subordinated or pari passu junior to the Notes or any Guarantee thereofNotes, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (iib) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,;
(C3) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium and fees Incurred in connection with such refinancing;
(4) shall not include (x) Indebtedness of a Restricted Subsidiary of the Issuer that is not a Subsidiary Guarantor that refinances Indebtedness of the Issuer or a Restricted Subsidiary that is a Subsidiary Guarantor; or (y) Indebtedness of the Issuer or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(5) in the case of any Refinancing Indebtedness in respect Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of Indebtedness under the Senior Credit Facilitiesthis Section 4.03(b), the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required deemed to have been Incurred and to be incurred substantially contemporaneously with the related refinancing outstanding under such clause (iv) or (xx) of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoingthis Section 4.03(b), as applicable, within 45 days following the incurrence and not this clause (xiv) for purposes of determining amounts outstanding under such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect clauses (iv) and (xx) of the Senior Credit Facilitiesthis Section 4.03(b) and provided, such Notesfurther, NXP Notes or Existing Secured Note, or Refinancing Indebtedness that subclause (1) of any of the foregoing, as applicable, and
this clause (Dxiv) shall not include:
apply to any refunding, refinancing or defeasance of (iA) the Notes or (B) any Secured Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14xv) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Issuer or any Restricted Subsidiary incurred Incurred to finance an acquisition or (y) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiary Subsidiaries or merged or amalgamated into the Company Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided provided, that after giving effect to such acquisition, merger or amalgamation amalgamation, either:
(A1) the Company Issuer would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Debt to Adjusted EBITDA Ratio test set forth in Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Debt to Adjusted EBITDA Ratio of the Company and the Restricted Subsidiaries is Issuer would be less than or equal to or greater than such ratio immediately prior to such acquisition, merger or amalgamation;
(15xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse (except for Standard Securitization Undertakings) to the Issuer or any Restricted Subsidiary other than a Receivables Subsidiary;
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five Business Days of its incurrenceIncurrence;
(16xviii) Indebtedness of the Company Issuer or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit FacilitiesAgreement, in a principal amount not in excess of the stated amount of such letter of creditcredit or bank guarantee;
(17xix) Contribution Indebtedness;
(Axx) Indebtedness of Restricted Subsidiaries that are not Guarantors; provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (xx), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), does not exceed the greater of (x) $75.0 million and (y) 10% of the Total Assets of the Restricted Subsidiaries of the Issuer that are not guarantors of any guarantee by Indebtedness of the Company Issuer;
(xxi) Indebtedness of the Issuer or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and
(xxii) Indebtedness consisting of Indebtedness of the Issuer or a Restricted Subsidiary owed by or issued to current or former officers, directors and employees thereof or any direct or indirect Parent thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Issuer or any direct or indirect Parent of the Issuer to the extent described in Section 4.04(b)(iv).
(c) For purposes of determining compliance with this Section 4.03, (1) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of one or more of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (i) through (xxii) in Section 4.03(b) or is entitled to be Incurred pursuant to Section 4.03(a), the Issuer shall, in its sole discretion divide, classify or reclassify or later divide, classify or reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock in any manner that complies with this Section 4.03 and such item of Indebtedness, Disqualified Stock or Preferred Stock shall be treated as having been Incurred pursuant to one or more of such clauses or pursuant to Section 4.03(a); provided that all Indebtedness under the Credit Agreement outstanding on the Issue Date shall be deemed to have been Incurred pursuant to Section 4.03(b)(i) and (2) at the time of Incurrence, the Issuer will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in Section 4.03(a) and clauses (i) through (xxii) in Section 4.03(b) without giving pro forma effect to the Indebtedness Incurred pursuant to clauses (i) through (xxii) in Section 4.03(b) when calculating the amount of Indebtedness that may be Incurred pursuant to Section 4.03(a). Accrual of interest, the accretion of accreted value, amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.03. Guarantees of, or other obligations in respect of any Restricted Subsidiary so long as letters of credit relating to, Indebtedness which is otherwise included in the incurrence determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness incurred represented by such Restricted Subsidiary is permitted under the terms of this Indenture, orguarantee or letter
Appears in 1 contract
Sources: Indenture (Intelsat S.A.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company Issuer and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of the proceeds therefrom had occurred at the beginning of such four-quarter period; provided that the amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors shall not exceed $275.0 million at any one time outstanding.
(b) The provisions of Section 4.09(a) hereof shall not apply to:
(1) (x) Indebtedness incurred pursuant to the incurrence of Indebtedness under Revolving Credit Facilities Facility by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed Subsidiary; provided that immediately after giving effect to have a principal amount equal to the face amount thereof)any such incurrence, and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount of all Indebtedness incurred under this clause (or, if issued x) and then outstanding does not exceed the greater of (A) $1,200.0 million less up to $150.0 million in the aggregate of all principal payments with original issue discount, respect to such Indebtedness made following the accreted valueIssue Date pursuant to clause (1) of Existing Secured Notes, Section 4.10(b) less the NXP Notes aggregate principal amount of outstanding obligations under or in respect of Receivables Facilities and Notes then outstanding, of (B) (i) $5,250.0 million, 90.0% of the eligible credit card and debit card receivables of the Issuer and its Restricted Subsidiaries plus (ii) €750.0 million90.0% of the net appraised orderly liquidation value of the eligible inventory of the Issuer and its Restricted Subsidiaries and (y) Indebtedness incurred pursuant to the Term Loan Facility by the Issuer or any Restricted Subsidiary; provided that after giving effect to any such incurrence, plus (iii) in the case aggregate principal amount of any refinancing of any all Indebtedness permitted incurred under this clause (y) and then outstanding does not exceed $2,400.0 million less up to $250.0 million in the aggregate of all principal payments with respect to such Indebtedness made following the Issue Date pursuant to clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingSection 4.10(b);
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Guarantee) (other than any Additional Notes), including any Guarantee of the Notes;
(3) Indebtedness (including, without limitation, the Existing Notes) of the Company, the Issuer and their its Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) (i) Indebtedness (including Capitalized Lease Obligations), ) incurred or Disqualified Stock and Preferred Stock incurred issued by the Company Issuer or any of its Restricted Subsidiaries, to finance the purchase, lease lease, replacement or improvement of property (real or personal) ), equipment or equipment other assets that is are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with and (ii) any Refinancing Indebtedness in respect thereof and all other Indebtedness, incurred or Disqualified Stock and/or or Preferred Stock issued and outstanding under to refund, refinance or replace any other Indebtedness incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (4), ; provided that the aggregate amount of Indebtedness incurred and Disqualified Stock and Preferred Stock issued pursuant to clauses (i) and (ii) of this clause (4) does not to exceed 4.0the greater of (A) $125.0 million and (B) 8% of Total Assets Assets, at any one time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bank guarantees or similar instruments issued or created in the ordinary course of business, including including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company Issuer or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) however, that the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company Issuer and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its Restricted SubsidiariesSubsidiaries or any pledge of such Capital Stock constituting a Permitted Lien) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness Stock not permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b)9);
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Sources: Indenture (Michaels Stores Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Company shall not permit any of its Restricted Subsidiary Subsidiaries (other than a Guarantor or Rexnord) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and any Restricted Subsidiary may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of the Company for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness ) in respect thereof and Guarantees in respect of such Indebtedness, up to an the aggregate principal amount outstanding at any one time, when taken together with time not to exceed the sum of (x) $1,064.0 million plus (y) an aggregate additional principal amount (oramount, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstandingany, of Indebtedness (for purposes of this (y) only, treating all Indebtedness then outstanding under this (i) $5,250.0 million, plus together with such Indebtedness to be Incurred as Secured Indebtedness) that does not cause the Secured Indebtedness Leverage Ratio of the Company to exceed 4.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom);
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer Issuers and any Guarantor the Guarantors of Indebtedness represented by the Notes Original Securities (not including any Additional Notes)Securities) and the Guarantees, including any Guarantee of the Notesas applicable;
(3iii) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b));
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company to finance (whether prior to or within 270 days after) the purchaseacquisition, lease lease, construction, repair, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued and then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed 4.0the greater of $170.0 million and 5.75% of Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the any acquisition or disposition of any business, assets or a SubsidiarySubsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company to a Restricted Subsidiary; provided that (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of the Company and its Restricted Subsidiaries) any such Indebtedness owing owed to a Restricted Subsidiary that is not Rexnord or a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notesobligations of the Company under the Securities; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence Incurrence of such IndebtednessIndebtedness not permitted by this (vii);
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred StockStock not permitted by this (viii);
(10ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor or Rexnord incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor or Rexnord (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of the Company and its Restricted Subsidiaries), such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor or the obligations of Rexnord; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this (ix);
(x) Hedging Obligations (excluding Hedging Obligations entered into that are not incurred for speculative purposespurposes but (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases or sales;
(11xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed the greater of $200.0 million and 7.5% of Total Assets at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred Indebtedness Incurred pursuant to this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which the Company, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this (xii));
(xiii) any guarantee by the Company, Rexnord or a Guarantor of Indebtedness or other obligations of the Company or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by the Company or such Restricted Subsidiary could have incurred is permitted under the terms of this Indenture; provided that if such IndebtednessIndebtedness is by its express terms subordinated in right of payment to the Securities or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee with respect to such Indebtedness shall be subordinated in right of payment to such Issuer’s obligations or such Guarantor’s Guarantee with respect to the Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by of a Restricted Subsidiary of the Company which serves to refund, refinance or defease any Restricted Subsidiary, of Indebtedness, Indebtedness Incurred or Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred issued as permitted under Section 4.09(a4.03(a) hereof and clauses (2i)(y), (3ii), (4iii), (iv), (vii), (xii), (xiv), (xv) and or (12)(axix) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock Stock, including any additional Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), fees, expenses and defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced,refinanced that were due on or after the date that is one year following the last maturity date of any Securities then outstanding were instead due on such date;
(B2) has a Stated Maturity which is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or (y) 91 days following the last maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (ia) Indebtedness subordinated or pari passu junior to the Notes Securities or any Guarantee thereofa Guarantee, as applicable, such Refinancing Indebtedness is subordinated or pari passu junior, as applicable, to the Notes Securities or the Guarantee at least to the same extent a Guarantee, as the Indebtedness being refinanced or refunded applicable, or (iib) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,;
(C4) is Incurred in an aggregate amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilitiesaggregate amount (or if issued with original issue discount, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any aggregate accreted value) then outstanding of the foregoingIndebtedness being refinanced plus premium (including tender premium), fees, expenses and defeasance costs Incurred in connection with such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, andrefinancing;
(D5) shall not include:
include (ix) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of a Restricted Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company that is not a Guarantor Guarantor, or (other than the Issuery) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of an Unrestricted Subsidiary; and
(6) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under (iv), (xii) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such (iv), (xii) or (xix) of this Section 4.03(b), as applicable, and not this (xiv) for purposes of determining amounts outstanding under such clauses (iv), (xii) or (xix) of this Section 4.03(b); provided, further, that subs (1) and (2) of this (xiv) shall not apply to any refunding or refinancing of any Bank Indebtedness;
(14xv) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a or any Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any of its Restricted Subsidiary Subsidiaries or merged merged, consolidated or amalgamated with or into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided provided, however, that after giving effect to such acquisitionacquisition or merger, merger consolidation or amalgamation either:
(A1) the Company would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or would be greater than immediately prior to such acquisitionacquisition or merger, merger consolidation or amalgamation;
(15xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five Business Days of its incurrenceIncurrence;
(16xviii) Indebtedness of the Company or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit FacilitiesAgreement, in a principal amount not in excess of the stated amount of such letter of credit;
(17xix) (A1) Indebtedness of Foreign Subsidiaries or (2) Indebtedness of the Company or any guarantee Restricted Subsidiaries Incurred in connection with an Investment in, or representing guarantees of Indebtedness of, joint ventures of the Company or any Restricted Subsidiary in an aggregate principal amount, under this (xix), not to exceed the greater of $150.0 million or 5.0% of Total Assets at the time of Incurrence;
(xx) Indebtedness of the Company or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(xxi) Indebtedness consisting of customary indemnification, adjustment of purchase price or similar obligations of the Company or any Restricted Subsidiary, in each case Incurred in connection with the acquisition or disposition of any assets by the Company or a any Restricted Subsidiary Subsidiary; and
(xxii) Indebtedness of Indebtedness the Company or other obligations of any Restricted Subsidiary so long as issued to any joint venture (regardless of the incurrence form of such legal entity) that is not a Subsidiary arising in the ordinary course of business in connection with the cash management operations (including with respect to intercompany self-insurance arrangements of the Company or any of its Restricted Subsidiaries). For purposes of determining compliance with this Section 4.03:
(1) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness incurred by such Restricted Subsidiary described in clauses (i) through (xxii) above or is permitted under entitled to be Incurred pursuant to Section 4.03(a), the terms of this Indenture, orIss
Appears in 1 contract
Sources: Indenture (Rexnord Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (ai) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Issuer shall not permit any of its Restricted Subsidiary Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer and any Restricted Subsidiary of the Issuer may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Debt to Adjusted EBITDA Ratio on a consolidated basis of the Issuer for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 be less than or equal to 6.75 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:to (collectively, “Permitted Debt”):
(1i) the incurrence Incurrence by the Issuer or its Restricted Subsidiaries of Indebtedness under the Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $4.0 billion outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus ;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer and any Guarantor its Restricted Subsidiaries of Indebtedness represented by the Notes (not including any Additional Notes) and the Guarantees, as applicable (and any Exchange Notes and Guarantees thereof), including any Guarantee of the Notes;
(3iii) Indebtedness of the Company, the Issuer and their its Restricted Subsidiaries in existence existing on the Issue Date or Date, including any Indebtedness Incurred on the Merger Issue Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b));
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer to finance (whether prior to or within 270 days after) the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued and then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed 4.0the greater of (x) $450.0 million and (y) 4% of Total Assets at any time outstanding; so long as such Indebtedness exists of the Issuer at the date time of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company Issuer or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the Transactions or the disposition of any business, assets or a SubsidiarySubsidiary of the Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the obligations of the Issuer under the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that is not a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into other than for speculative purposes): (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; or (2) for the purpose of fixing or hedging currency exchange rate risk or commodity pricing riskwith respect to any currency exchanges;
(11xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company Issuer or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) Issuer and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary of the Issuer not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencewhich, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed the greater of (x) $450.0 million and (y) 4% of Total Assets of the Issuer at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Incurred or issued under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which the Company Issuer or such the Restricted Subsidiary Subsidiary, as the case may be, could have incurred Incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a4.03(a) hereof without reliance on upon this clause (12)(bxii));
(13xiii) the incurrence any guarantee by the Company Issuer or a Restricted Subsidiary of Indebtedness or other Obligations of the Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness or other Obligations by the Issuer or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of Indebtednesssuch guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Notes or such Guarantor’s Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Notes or the Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Issuer which serves to refund or refinance or defease any Indebtedness, Indebtedness Incurred or Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a4.03(a) hereof and clauses (2ii), (3iii), (4iv), (xiv), (xv), (xix) and (12)(axx) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock Stock, including additional any Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,refinanced and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that was due on or after the date one year following the last maturity date of any Notes then outstanding were instead due on such date one year following the last date of maturity of any Notes then outstanding;
(B2) to the extent such Refinancing Indebtedness refinances (ia) Indebtedness subordinated or pari passu junior to the Notes or any Guarantee thereofNotes, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (iib) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,;
(C3) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium and fees Incurred in connection with such refinancing;
(4) shall not include (x) Indebtedness of a Restricted Subsidiary of the Issuer that is not a Subsidiary Guarantor that refinances Indebtedness of the Issuer or a Restricted Subsidiary that is a Subsidiary Guarantor; or (y) Indebtedness of the Issuer or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(5) in the case of any Refinancing Indebtedness in respect Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of Indebtedness under the Senior Credit Facilitiesthis Section 4.03(b), the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required deemed to have been Incurred and to be incurred substantially contemporaneously with the related refinancing outstanding under such clause (iv) or (xx) of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoingthis Section 4.03(b), as applicable, within 45 days following the incurrence and not this clause (xiv) for purposes of determining amounts outstanding under such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect clauses (iv) and (xx) of the Senior Credit Facilitiesthis Section 4.03(b) and provided, such Notesfurther, NXP Notes or Existing Secured Note, or Refinancing Indebtedness that subclause (1) of any of the foregoing, as applicable, and
this clause (Dxiv) shall not include:apply to any refunding, refinancing or defeasance of (A) the Notes or (B) any Secured Indebtedness;
(ixv) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiary Subsidiaries or merged or amalgamated into the Company Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided provided, however, that such Indebtedness, Disqualified Stock or Preferred Stock is not Incurred in contemplation of such acquisition, merger or amalgamation; provided, further, however, that after giving effect to such acquisition, merger or amalgamation amalgamation, either:
(A1) the Company Issuer would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Debt to Adjusted EBITDA Ratio test set forth in Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Debt to Adjusted EBITDA Ratio of the Company and the Restricted Subsidiaries is Issuer would be less than or equal to or greater than such ratio immediately prior to such acquisition, merger or amalgamation;
(15xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse (except for Standard Securitization Undertakings) to the Issuer or any Restricted Subsidiary other than a Receivables Subsidiary;
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five Business Days of its incurrenceIncurrence;
(16xviii) Indebtedness of the Company Issuer or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit FacilitiesAgreement, in a principal amount not in excess of the stated amount of such letter of creditcredit or bank guarantee;
(17xix) Contribution Indebtedness;
(Axx) Indebtedness of Restricted Subsidiaries that are not Guarantors; provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (xx), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), does not exceed the greater of (x) $75.0 million and (y) 10% of the Total Assets of the Restricted Subsidiaries of the Issuer that are not guarantors of any guarantee by Indebtedness of the Company Issuer;
(xxi) Indebtedness of the Issuer or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and
(xxii) Indebtedness consisting of Indebtedness of the Issuer or a Restricted Subsidiary owed by or issued to current or former officers, directors and employees thereof or any direct or indirect Parent thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Issuer or any direct or indirect Parent of the Issuer to the extent described in Section 4.04(b)(iv).
(c) For purposes of determining compliance with this Section 4.03, (1) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of one or more of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (i) through (xxii) in Section 4.03(b) or is entitled to be Incurred pursuant to Section 4.03(a), the Issuer shall, in its sole discretion divide, classify or reclassify or later divide, classify or reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock in any manner that complies with this Section 4.03 and such item of Indebtedness, Disqualified Stock or Preferred Stock shall be treated as having been Incurred pursuant to one or more of such clauses or pursuant to Section 4.03(a); provided that all Indebtedness under the Credit Agreement outstanding on the Issue Date shall be deemed to have been Incurred pursuant to Section 4.03(b)(i) and (2) at the time of Incurrence, the Issuer will be entitled to divide and classify an item of Indebtedness or other obligations in more than one of any Restricted Subsidiary so long the types of Indebtedness described in Section 4.03(a) and clauses (i) through (xxii) in Section 4.03(b) without giving pro forma effect to the Indebtedness Incurred pursuant to clauses (i) through (xxii) in Section 4.03(b) when calculating the amount of Indebtedness that may be Incurred pursuant to Section 4.03(a). Accrual of interest, the accretion of accreted value, amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the incurrence exchange rate of such currencies shall not be deemed to be an Incurrence of Indebtedness incurred by such Restricted Subsidiary is permitted under the terms for purposes of this IndentureSection 4.03. Guarantees of, oror obligations in respect of letters of credit relating to, Indebtedness which is oth
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Sources: Indenture (Intelsat S.A.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued Applicable Measurement Period would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof foregoing limitations shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with time not to exceed the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (i) $5,250.0 million, plus 350.0 million and (ii) €750.0 million, plus (iii) in the case 14.0% of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingConsolidated Tangible Net Worth;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Guarantee thereof) (other than any Additional Notes, if any, or guarantees with respect thereto), including any Guarantee of the Notes;
(3) Indebtedness incurred pursuant to the Existing Facilities in an aggregate principal amount at any time outstanding not to exceed the maximum amount available under the terms of each Existing Facility as in effect on the Company, Issue Date;
(4) Indebtedness of the Issuer and their the Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1), (2) and (23) of this Section 4.09(b10.11(b));
(45) Indebtedness (including Capitalized Lease Obligations and Purchase Money Obligations), Disqualified Stock and Preferred Stock incurred by the Company Issuer or any of its the Restricted Subsidiaries, Subsidiaries to finance the purchase, lease lease, expansion, construction, development, replacement, maintenance, upgrade, installation, replacement, repair or improvement of property (real or personal) ), equipment or equipment that is used any other asset (including, but not limited to, MSRs, Servicing Advances, mortgages or useful other loans, mortgage-related securities or derivatives, consumer receivables, REO Assets, Residual Interests, mortgage-related receivables or other similar assets (or any interests in a Similar Businessany of the foregoing)), whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstandingassets; so long as provided that the Liens securing such Indebtedness exists may not extend to any other property owned by the Issuer or any of its Restricted Subsidiaries at the date time the Lien is incurred and the Indebtedness secured by the Lien may not be incurred more than 270 days after the latter of the acquisition or completion of the construction of the property subject to the Lien, provided, further that the amount of such purchaseIndebtedness does not exceed the fair market value of the assets developed, lease constructed, purchased, leased, repaired, maintained, expanded, replaced, upgraded, installed or improvement or is created within 270 days thereafterimproved with the proceeds of such Indebtedness;
(56) Indebtedness incurred by the Company Issuer or any of its the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of businessbusiness or consistent with past practice, including letters of credit in favor of suppliers or trade creditors or in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit performance, completion or the incurrence of such Indebtednesssurety bonds, such obligations are reimbursed within 30 days following such drawing health, disability or incurrenceother employee benefits or property, casualty or liability insurance or self-insurance;
(67) Permitted Funding Indebtedness;
(8) Permitted Securitization Indebtedness and Indebtedness under Credit Enhancement Agreements;
(9) Non-Recourse Indebtedness;
(10) Indebtedness arising from agreements of the Company Issuer or its any of the Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts earn-out or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets assets, a Subsidiary or a Subsidiaryan Investment, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(711) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor Guarantor, excluding any Indebtedness in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business or consistent with past practice (other than and not in connection with the Issuer) borrowing of money), is expressly subordinated in right of payment (to the extent permitted by applicable law and it does not result in material adverse tax consequences) to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause;
(12) Indebtedness of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor, excluding any Indebtedness in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business or consistent with past practice (and not in connection with the borrowing of money), such Indebtedness is expressly subordinated in right of payment (to the extent permitted by applicable law and it does not result in material adverse tax consequences) to the Notes or the Guarantee of the Notes of such Guarantor; provided, further, that any subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause;
(13) shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such Preferred Stock or Disqualified Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock or Disqualified Stock (except to the Company Issuer or another Restricted Subsidiary or any pledge of its Restricted Subsidiariessuch Capital Stock constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed in each case to be an issuance of such shares of Preferred Stock or Disqualified Stock, as applicable (to the extent such Preferred Stock or Disqualified Stock is then outstanding), not permitted by this clause;
(1014) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for and, to the purpose extent constituting Indebtedness, of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing riskobligations under Permitted Warrant Transactions;
(1115) obligations in respect of self-insurance and obligations in respect of stays, customs, performance, indemnity, bid, appeal appeal, judgment, surety and surety other similar bonds or instruments and performance, bankers’ acceptance facilities and completion guarantees and similar obligations provided by the Company Issuer or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of businessbusiness or consistent with past practice or in connection with judgments that do not result in an Event of Default;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any of its Restricted Subsidiary equal Subsidiaries in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued pursuant to 200.0this clause (16)(a) and any outstanding amount of Indebtedness under clause (17) of this Section 10.11(b) incurred to refinance Indebtedness initially incurred in reliance on this clause (16)(a), does not at any one time outstanding exceed,200.0% of the net cash proceeds received by the Company Issuer since immediately after the Transaction Issue Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies Issuer or cash contributed to the capital of the Company Issuer (in each case, other than Excluded Contributions or proceeds of Disqualified Stock or sales of Equity Interests to the Company Issuer or any of its Subsidiaries) as determined in accordance with clauses (3)(B3)(b) and (3)(C3)(c) of Section 4.07(a10.10(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b10.10(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1), (2) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, Issuer or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued pursuant to this clause (12)(b16)(b) and any outstanding amount of Indebtedness under clause (17) of this Section 10.11(b) incurred to refinance Indebtedness initially incurred in reliance on this clause (16)(b), does not at any one time outstanding exceed the greater of (x) $900.0 250.0 million and (y) 10.0% of Consolidated Tangible Net Worth (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b16)(b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b16)(b) but shall be deemed incurred for the purposes of pursuant to Section 4.09(a10.11(a) hereof from and after the first date on which the Company Issuer or such Restricted Subsidiary could have incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b10.11(a));
(1317) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or the issuance by the Issuer or any Restricted Subsidiary, Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which that serves to refund refund, refinance, replace, renew, extend, defease, repay, prepay, redeem or refinance retire (collectively, “refinance” with “refinances,” “refinanced” and “refinancing” having a correlative meaning) any Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any of its Restricted Subsidiaries incurred or issued as permitted under Section 4.09(a10.11(a) hereof and clauses (2), (34), (45) and (12)(a) of this Section 4.09(b16), this clause (1317) and clause clauses (1418), (22), (23), (27) and (28) of this Section 4.09(b10.11(b) or any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay accrued but unpaid interest, dividends, premiums (including reasonable tender premiums), defeasance costs, underwriting discounts, fees, costs and expenses (including original issue discount, upfront fees or similar fees) in connection therewith with such refinancing (the “Refinancing Indebtedness”) on or prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded refinanced (or refinancedrequires no or nominal payments in cash (other than interest payments) prior to the date that is 91 days after the maturity date of the Notes),
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu in right of payment to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu in right of payment to the Notes or the such Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,, and
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) include Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of the Company Issuer or the Issuera Guarantor; provided, further, that subclause (A) of this clause (17) shall not apply to any refinancing of any Secured Indebtedness;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(1418) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, Issuer or a Restricted Subsidiary incurred or issued to finance an acquisition or Investment or (y) Persons that are acquired by the Company Issuer or any a Restricted Subsidiary or merged into, amalgamated with or amalgamated into consolidated with the Company Issuer or a Restricted Subsidiary in accordance with the terms of this IndentureIndenture (including designating an Unrestricted Subsidiary as a Restricted Subsidiary); provided that after giving pro forma effect to such Investment, acquisition, merger merger, amalgamation or amalgamation consolidation, either:
(A) the Company Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, 10.11(a); or
(B) the Fixed Charge Coverage Ratio of the Company Issuer and the its Restricted Subsidiaries is equal to or greater than immediately prior to such Investment, acquisition, merger merger, amalgamation or amalgamationconsolidation, provided, however, that on a pro forma basis, the aggregate amount of Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to clause (x) by any Restricted Subsidiaries that are not Guarantors, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued pursuant to this proviso and any outstanding amount of Indebtedness under clause (17) of this Section 10.11(b) incurred to refinance Indebtedness initially incurred in reliance on this proviso, does not at any one time outstanding exceed the greater of (i) $100.0 million and (ii) 4.0% of Consolidated Tangible Net Worth;
(15a) Cash Management Obligations, (b) Indebtedness in respect of netting services, overdraft protections and similar arrangements and other Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
and (16c) Indebtedness owed on a short-term basis of no longer than 30 days to banks and other financial institutions incurred in the ordinary course of business or consistent with past practice of the Company or any of Issuer and its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of with such letter of credit;
(17) (A) any guarantee by the Company banks or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orf
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Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Company shall not permit any of its Restricted Subsidiary Subsidiaries (other than a Guarantor) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of the Company for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $805 million outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus ;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer Issuers and any Guarantor the Guarantors of Indebtedness represented by (i) the Original Securities (not including any Additional Securities) and the Guarantees, as applicable (including the Exchange Securities and guarantees thereof) and (ii) the Senior Notes (not including any Additional additional Senior Notes) and the related guarantees thereof (including exchange Senior Notes and related guarantees thereof), including any Guarantee of the Notes;
(3iii) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b));
(4iv) (a) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company to finance (whether prior to or within 270 days after) the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued and then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed the greater of $75.0 million and 4.0% of Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the Transactions or any other acquisition or disposition of any business, assets or a SubsidiarySubsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing owed to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notesobligations of the Company under the Securities; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence Incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into that are not incurred for speculative purposespurposes and either: (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases or sales;
(11xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amount or liquidation preferenceamount, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed $100.0 million at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Indebtedness Incurred under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which the Company, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii));
(xiii) any guarantee by the Company or a Guarantor of Indebtedness or other obligations of the Company or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by the Company or such Restricted Subsidiary could have incurred is permitted under the terms of this Indenture; provided that if such IndebtednessIndebtedness is by its express terms subordinated in right of payment to the Securities or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of such Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantor’s Guarantee with respect to the Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by of a Restricted Subsidiary of the Company which serves to refund, refinance or defease any Restricted Subsidiary, of Indebtedness, Indebtedness Incurred or Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred issued as permitted under Section 4.09(a4.03(a) hereof and clauses (2ii), (3iii), (4iv), (xiv), (xv), (xix) and (12)(axx) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock Stock, including additional any Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,refinanced and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date one year following the last maturity date of any Securities then outstanding were instead due on such date one year following the last date of maturity of the Securities;
(B2) has a Stated Maturity which is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or (y) 91 days following the last maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (ia) Indebtedness subordinated equal to or pari passu junior to the Notes Securities or any the Guarantee thereofof such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is subordinated equal to or pari passu junior, as applicable, to the Notes Securities or the Guarantee at least to the same extent of such Restricted Subsidiary, as the Indebtedness being refinanced or refunded applicable, or (iib) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,;
(C4) is Incurred in an aggregate amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium, fees and expenses Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is not a Guarantor that refinances Indebtedness of the Company or a Restricted Subsidiary that is a Guarantor, or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(6) in the case of any Refinancing Indebtedness in respect Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of Indebtedness under the Senior Credit Facilitiesthis Section 4.03(b), the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required deemed to have been Incurred and to be incurred substantially contemporaneously with the related refinancing outstanding under such clause (iv) or (xx) of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoingthis Section 4.03(b), as applicable, within 45 days following the incurrence and not this clause (xiv) for purposes of determining amounts outstanding under such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect clauses (iv) or (xix) of the Senior Credit Facilitiesthis Section 4.03(b); provided, such Notesfurther, NXP Notes or Existing Secured Note, or Refinancing Indebtedness that subclauses (1) and (2) of any of the foregoing, as applicable, and
this clause (Dxiv) shall not include:apply to any refunding or refinancing of any Bank Indebtedness.
(ixv) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any of its Restricted Subsidiary Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided provided, however, that such Indebtedness, Disqualified Stock or Preferred Stock is not Incurred in contemplation of such acquisition, merger or amalgamation or to provide all or a portion of the funds or credit support required to consummate such acquisition, merger or amalgamation; provided, further, however, that after giving effect to such acquisition, merger or amalgamation acquisition and the Incurrence of such Indebtedness either:
(A1) the Company would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in the first sentence of Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or would be greater than immediately prior to such acquisition, merger or amalgamation;
(15xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five Business Days of its incurrenceIncurrence;
(16xviii) Indebtedness of the Company or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit FacilitiesAgreement, in a principal amount not in excess of the stated amount of such letter of credit;
(17xix) Contribution Indebtedness;
(Axx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) Indebtedness of the Company or any guarantee Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and
(xxii) Indebtedness consisting of customary indemnification, adjustment of purchase price or similar obligations of the Company or any Restricted Subsidiary, in each case Incurred in connection with the acquisition or disposition of any assets by the Company or a any Restricted Subsidiary Subsidiary. For purposes of determining compliance with this Section 4.03, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xxii) above or is entitled to be Incurred pursuant to Section 4.03(a), the Issuers shall, in their sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness in any manner that complies with this Section 4.03; provided that all Indebtedness under the Credit Agreement outstanding on the Issue Date shall be deemed to have been Incurred pursuant to clause (i) of Section 4.03(b) and the Issuers shall not be permitted to reclassify all or other obligations of any Restricted Subsidiary so long as the incurrence portion of such Indebtedness incurred under the Credit Agreement outstanding on the Issue Date. Accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.03. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such Restricted Subsidiary is permitted under guarantee or letter of credit, as the terms case may be, was in compliance with this Section 4.03. For purposes of this Indenturedetermining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, orthe U.S. dollar-equivalent principal amount of Indebtedness denominated in a fore
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Sources: Indenture (Rexnord Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its the Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of the Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company Issuer and its the Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of the proceeds therefrom had occurred at the beginning of such four-quarter period; provided that the amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors shall not exceed $75.0 million at any one time outstanding.
(b) The provisions of Section 4.09(a) hereof shall not apply to:
(1) (x) Indebtedness incurred pursuant to the incurrence of Indebtedness under Revolving Credit Facilities Facility by the Company, the Issuer or any other Restricted Subsidiary and Subsidiary; provided that immediately after giving effect to any such incurrence, the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an then outstanding aggregate principal amount outstanding at any one of all Indebtedness incurred under this clause (x), which may be reborrowed from time to time, when taken together does not exceed the greater of (A) $350.0 million less the aggregate amount of all principal payments with respect to such Indebtedness made following the Issue Date pursuant to clause (1) of Section 4.10(b) hereof less the aggregate principal amount of outstanding obligations under or in respect of Receivables Facilities and (or, if issued with original issue discountB) 85.0% of the book value of the receivables and inventory of the Issuer and the Restricted Subsidiaries and (y) Indebtedness incurred pursuant to the Term Loan Facility by the Issuer or any Restricted Subsidiary; provided that after giving effect to any such incurrence, the accreted value) aggregate principal amount of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any all Indebtedness permitted incurred under this clause (1y) or any portion thereof, and then outstanding does not exceed $1,425.0 million less the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection all principal payments with respect to such refinancingIndebtedness made following the Issue Date pursuant to clause (1) of Section 4.10(b) hereof;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Guarantee) (other than any Additional Notes), including any Guarantee of the Notes;
(3) Indebtedness of the Company, the Issuer and their the Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) (i) Indebtedness (including Capitalized Lease Obligations), ) incurred or Disqualified Stock and Preferred Stock incurred issued by the Company Issuer or any of its the Restricted Subsidiaries, Subsidiaries to finance the development, construction, purchase, lease lease, repairs, additions or improvement of property (real or personal) ), equipment or equipment other fixed or capital assets that is are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with and (ii) any Refinancing Indebtedness in respect thereof and all other Indebtedness, incurred or Disqualified Stock and/or or Preferred Stock issued and outstanding under to refund, refinance or replace any other Indebtedness incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (4), ; provided that the aggregate amount of Indebtedness incurred and Disqualified Stock and Preferred Stock issued pursuant to clauses (i) and (ii) of this clause (4) does not to exceed 4.0% of Total Assets $100.0 million at any one time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred by the Company Issuer or any of its the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company Issuer or its the Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that:
(A) such Indebtedness is not reflected on the balance sheet of the Company Issuer, or any of its the Restricted Subsidiaries prepared in accordance with GAAP (contingent obligations Contingent Obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a6)(A)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value value, as determined in good faith by the Issuer, of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company Issuer and its the Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another Restricted Subsidiary; , provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its the Restricted SubsidiariesSubsidiaries or any pledge of such Capital Stock constituting a Permitted Lien) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness Stock not permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b)9);
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Sources: Indenture (Petco Holdings Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently contingently, or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, provided that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis for the Company Issuer and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter periodthe most recently ended four fiscal quarters for which internal financial statements are available; provided further that the amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors shall not (together with any Refinancing Indebtedness in respect thereof) exceed the greater of (x) $200.0 million and (y) 4.50% of Total Assets at any one time outstanding.
(b) The provisions of subsection (a) of this Section 4.09(a) hereof 4.09 shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof); provided that immediately after giving effect to any such incurrence, and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an the then outstanding aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any all Indebtedness permitted under this clause (1) or does not exceed at any portion thereof, the aggregate one time an amount equal to (a) $2,800.0 million and (b) an additional amount of fees, underwriting discounts, premiums Secured Indebtedness provided that the Consolidated Secured Debt Ratio does not exceed 3.00 to 1.00 (after giving pro forma effect to the incurrence of such Indebtedness and other costs and expenses Incurred in connection with such refinancingthe application of the net proceeds therefrom);
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by (a) the Notes (not including any Additional Notes), including any Guarantee ) and the Guarantees thereof in respect of the NotesNotes issued and outstanding on the Issue Date and (b) the 2025 Notes and the guarantees thereof outstanding on the Issue Date;
(3) Indebtedness of the Company, the Issuer and their its Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses clause (1) and or (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred or issued by the Company Issuer or any of its Restricted Subsidiaries, to finance the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets, in an aggregate principal amountamount or liquidation preference which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued then outstanding and outstanding together with any other Indebtedness incurred under this clause (4), does not to exceed 4.0the greater of (a) $200 million and (b) 4.9% of the Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterincurrence;
(5) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar facilities issued or entered into in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit performance or the incurrence of such Indebtednesssurety bonds, such obligations are reimbursed within 30 days following such drawing health, disability or incurrenceother employee benefits or property, casualty or liability insurance or self-insurance;
(6) Indebtedness arising from agreements of the Company Issuer or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligationsobligations (including earn-outs or deferred compensation arrangements), in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
provided that (Aa) such Indebtedness is not reflected on the balance sheet of the Company Issuer or any of its Restricted Subsidiaries (contingent obligations it being understood that Contingent Obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed not to be reflected on such balance sheet for purposes of this clause (6)) and (a)); and
(Bb) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value (as determined in good faith by the Issuer) of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company Issuer and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any the Restricted Subsidiary holding such Indebtedness of the Issuer ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another Restricted Subsidiary; , provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred StockStock not permitted by this clause (9);
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing riskrisk (excluding Hedging Obligations entered into for speculative purposes);
(11) obligations in respect of performance, bid, appeal appeal, supersedeas and surety bonds and completion guarantees and similar obligations provided by the Company Issuer or any of its Restricted Subsidiaries Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of businessbusiness or consistent with past practice;
(12) (a) Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which which, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b12), does not at any one time outstanding exceed the greater of (a) $900.0 250.0 million and (b) 6.0% of Total Assets (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b12) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company Issuer or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 subsection (a) hereof of this Section 4.09 without reliance on this clause (12)(b12));
(13) the incurrence or issuance by the Company Issuer or any Restricted Subsidiary, Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance refinance:
(a) any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under subsection (a) of this Section 4.09(a) hereof 4.09 and clauses (2), (3), (4) and (12)(a3) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b), or
(b) or any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to so refund or refinance such the Indebtedness, Disqualified Stock or Preferred Stock including described in clause (a) of this Section 4.09(b)(13), including, in each case, additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs costs, accrued interest and fees and expenses in connection therewith (collectively, the “Refinancing Indebtedness”) prior to its respective maturity; provided, provided that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) the principal amount (or accreted value, if applicable) of such Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness refinanced or refunded (plus all amounts to pay premiums (including tender premiums), defeasance costs, underwriting discounts, commissions, accrued interest and fees and expenses in connection therewith),
(C) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu in right of payment to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu in right of payment, as the case may be, to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the IssuerGuarantor; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Issuer or any Restricted Subsidiary or merged into or amalgamated into consolidated with the Company Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that (i) such Indebtedness, Disqualified Stock or Preferred Stock is an aggregate principal amount or liquidation preference not to exceed $100.0 million at any time outstanding plus (ii) an unlimited amount of additional Indebtedness, Disqualified Stock or Preferred Stock if after giving effect to such acquisition, merger or amalgamation consolidation, either:
(Aa) the Company Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in subsection (a) of this Section 4.09(a) hereof4.09, or
(Bb) the Fixed Charge Coverage Ratio of the Company Issuer and the its Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamationconsolidation;
(15) Indebtedness arising (a) from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of notice of its incurrence; and (b) as a result of the endorsement in the ordinary course of business of negotiable instruments in the course of collection;
(16) Indebtedness of the Company Issuer or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (Aa) any guarantee by the Company Issuer or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Sources: Indenture (Hill-Rom Holdings, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) ), and the Company Issuer will not issue any shares of Disqualified Stock not, and will not permit any Restricted Subsidiary to to, issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares Issuer and any of Disqualified Stock, and, subject to Section 4.09(c) hereof, any Restricted Subsidiary the Guarantors may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if (1) the Fixed Charge Coverage Leverage Ratio on a consolidated basis for the Company Issuer and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 less than 5.5 to 1.00 1.0, determined on a pro forma basis (including a pro forma application of the “Fixed Charge Coverage Test”)net proceeds therefrom) and (2) in the case of any incurrence of Secured Indebtedness, the Secured Leverage Ratio on a consolidated basis for the Issuer and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred would have been less than 4.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), in each case as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.;
(b) The provisions of Section 4.09(a) hereof shall foregoing limitations will not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other of the Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one timeof (a) $10.0 million if, when taken together with the aggregate principal amount (or, if issued with original issue discountimmediately after giving effect to such incurrence on a pro forma basis, the accreted valueSecured Leverage Ratio on a consolidated basis for the Issuer and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available would have been greater than or equal to 4.5 to 1.0 or (b) of Existing Secured Notes$22.5 million if, immediately after giving effect to such incurrence on a pro forma basis (assuming that any Credit Facilities constituting revolving Indebtedness are fully drawn), the NXP Notes Secured Leverage Ratio on a consolidated basis for the Issuer and Notes then outstandingits Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available would have been less than 4.5 to 1.0; provided, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any that all Indebtedness permitted under incurred pursuant to this clause (1) shall constitute Pari Passu Lien Indebtedness, Junior Lien Indebtedness, Senior Unsecured Pari Passu Indebtedness or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingSubordinated Indebtedness;
(2) the incurrence by the Issuer and or any Guarantor of Indebtedness represented by the Notes (not including any Guarantee) (other than any Additional Notes), including any Guarantee of the Notes;
(3) Indebtedness of the CompanyIndebtedness, the Issuer Disqualified Stock and their Subsidiaries Preferred Stock in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1Section 4.04(b)(1) and (2) of this Section 4.09(b));
(4) (i) Indebtedness (including Capitalized Lease Obligations), ) incurred or Disqualified Stock and or Preferred Stock incurred issued by the Company Issuer or any of its Restricted Subsidiaries, in each case to finance the purchase, lease lease, construction, repair, maintenance, installation or improvement of property (real or personal) ), plant or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and (ii) Attributable Indebtedness in respect of a Sale and Lease-Back Transaction, in an aggregate principal amount, together with any Refinancing amount for all such Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), ) not to exceed 4.0% of Total Assets $10.0 million at any one time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptance or surety bonds issued in the ordinary course of business, including letters of credit business in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation or similar claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company Issuer or its a Restricted Subsidiaries Subsidiary providing for indemnification, contribution, earnout, adjustment of purchase price, earnouts price or similar obligations, in each case, case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a SubsidiaryRestricted Subsidiary otherwise permitted under this Indenture, other than guarantees Guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, provided that:
(Aa) the maximum aggregate liability in respect of all such Indebtedness in connection with a disposition shall at no time exceed the gross proceeds, including non-cash proceeds (the fair market value of such non-cash proceeds being measured in Good Faith by the Issuer at the time received and without giving effect to subsequent changes in value) actually received by the Issuer and its Restricted Subsidiaries in connection with such disposition; and
(b) such Indebtedness is not reflected on the balance sheet of the Company Issuer or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company Issuer owing to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Non-Guarantor Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause;
(8) Indebtedness of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness owing to a Non-Guarantor Subsidiary, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such other Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause;
(9) shares of Preferred Stock of the Issuer or a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such other Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its Restricted Subsidiaries) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred StockStock not permitted by this clause;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, or exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds bonds, performance and completion guarantees or obligations in respect of letters of credit related thereto provided by the Company Issuer or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b12), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b))15.0 million;
(13) the incurrence or issuance by the Company Issuer or any Restricted Subsidiary, Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund refund, replace or refinance any Indebtedness, Indebtedness incurred or Disqualified Stock or Preferred Stock incurred issued as permitted under Section 4.09(a4.04(a) hereof and clauses (2), or 4.04(b)(2) or (3), ) (4) and (12)(a) of this Section 4.09(bother than any Disqualified Stock outstanding on the Issue Date or any Preferred Stock Refinancing Indebtedness in respect thereof), this clause (13Section 4.04(b)(13) and clause (14) of this or Section 4.09(b4.04(b)(15) or any Indebtedness, Indebtedness incurred or Disqualified Stock or Preferred Stock issued to so refund refund, replace or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Indebtedness incurred or Disqualified Stock or Preferred Stock incurred issued to pay premiums (including reasonable tender premiums), defeasance costs costs, accrued (or, in the case of Additional Interest, payable) interest and fees and expenses in connection therewith (the any such Indebtedness, Disqualified Stock and/or Preferred Stock being referred to as “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(Aa) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded refunded, replaced or refinanced,;
(Bb) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded refunded, (ii) Junior Lien Collateral Indebtedness, such new Indebtedness is Junior Lien Collateral Indebtedness, Senior Unsecured Pari Passu Indebtedness or Indebtedness subordinated to the Notes or a Guarantee, (iii) Senior Unsecured Pari Passu Indebtedness, such new Indebtedness is Senior Unsecured Pari Passu Indebtedness or Indebtedness subordinated to the Notes or a Guarantee or (iiiv) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,;
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(Dc) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Non-Guarantor Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or the Issuer;a Guarantor; or
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(d) shall not be in a principal amount in excess of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) of, premium, if any, on, accrued (or, in the case of Additional Interest, payable) interest on and related fees and expenses (including tender premiums) of, the Indebtedness being refunded or refinanced; and
(e) shall not have a stated maturity date, in the case of Indebtedness, and shall not provide for any mandatory repayment, redemption or repurchase, in the case of Disqualified Stock or Preferred Stock, in each case prior to the earlier of (i) the stated maturity of the Indebtedness or the mandatory repayment, redemption or repurchase date of the Disqualified Stock or Preferred Stock, as the case may be, being so refunded or refinanced or (ii) 91 days after the stated maturity of the Notes; provided that Refinancing Indebtedness may permit the payment, purchase, redemption, defeasance or other acquisition or retirement for value of any Refinancing Indebtedness pursuant to and in accordance with provisions similar to those set forth in Sections 4.05 and 4.12;
(14) Junior Lien Collateral Indebtedness, Senior Unsecured Pari Passu Indebtedness, Subordinated Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Guarantor incurred or issued in exchange for, or the net proceeds of which are used substantially concurrently to extend, refinance, tender for, renew, replace, defease or refund the Series B Preferred Stock, or any Junior Lien Collateral Indebtedness, Senior Unsecured Pari Passu Indebtedness, Subordinated Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Guarantor incurred or issued to so refinance, tender for, replace or refund any such Indebtedness, Disqualified Stock or Preferred Stock incurred or issued pursuant to this clause (x14), including additional Junior Lien Collateral Indebtedness, Senior Unsecured Pari Passu Indebtedness or Subordinated Indebtedness incurred or Disqualified Stock or Preferred Stock issued to pay premiums (including tender premiums), defeasance costs and fees and expenses in connection therewith (any such Junior Lien Collateral Indebtedness, Senior Unsecured Pari Passu Indebtedness, Subordinated Indebtedness, Disqualified Stock and/or Preferred Stock being referred to as “Preferred Stock Refinancing Indebtedness”); provided that:
(a) such Preferred Stock Refinancing Indebtedness has a Weighted Average Life to Maturity at the time such Preferred Stock Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of the Series B Preferred Stock (if that is being refunded or refinanced) or the Preferred Stock Refinancing Indebtedness being refunded or refinanced;
(b) the Company oraggregate principal amount of such Preferred Stock Refinancing Indebtedness shall not exceed the sum of the aggregate liquidation preference of and accumulated unpaid dividends on the Series B Preferred Stock or the aggregate principal amount (or if issued with original issue discount, subject the aggregate accreted value) of, premium, if any, on, and accrued interest on the Preferred Stock Refinancing Indebtedness, as the case may be, being so refunded or refinanced, plus, in each case, the reasonable fees and expenses (including tender premiums) related to Section 4.09 such refunding or refinancing;
(c) hereofsuch Preferred Stock Refinancing Indebtedness shall not have a stated maturity date, a Restricted Subsidiary incurred and shall not provide for any amortization or mandatory repayment, redemption or repurchase, or any other repayment, redemption or repurchase or any acceleration at the option of the holder thereof, in each case prior to finance an 91 days after the stated maturity of the Notes; provided that Preferred Stock Refinancing Indebtedness may permit the payment, purchase, redemption, defeasance or other acquisition or (y) Persons that are acquired by the Company or retirement for value of any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary Preferred Stock Refinancing Indebtedness pursuant to and in accordance with the terms of this Indenture; provided that after giving effect provisions similar to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test those set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company Sections 4.05 and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation4.12;
(15d) Indebtedness arising from the honoring by a bank annual interest, dividends or distributions payable in cash on such Preferred Stock Refinancing Indebtedness, together with the annual interest, dividends and distributions payable in cash on any outstanding Series B Preferred Stock or other financial institution Preferred Stock Refinancing Indebtedness, shall not exceed the amount of a check, draft cash dividends that would have been permitted to be paid pursuant to Section 4.03(b)(5) during any four consecutive fiscal quarters if no Preferred Stock Refinancing Indebtedness had been issued or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;were outstanding; and
(16e) the aggregate amount of Junior Lien Collateral Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued incurred pursuant to this clause (14), together with the Credit Facilities, in a principal amount not in excess of the stated aggregate amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orJunior Lien Colla
Appears in 1 contract
Sources: Senior Secured Notes Indenture (Spanish Broadcasting System Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, provided that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company Issuer and its Restricted Subsidiaries’ Subsidiaries for the Issuer’s most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors of the Notes shall not exceed $40.0 million at any one time outstanding.
(b) The provisions of Section 4.09(a) hereof shall not apply to:
(1i) the incurrence of Indebtedness under pursuant to Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with ; provided that the aggregate principal amount (orof such Indebtedness outstanding pursuant to this Section 4.09(b)(i) without duplication, if issued with original issue discount, does not exceed an amount equal to the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (iA) $5,250.0 million, plus 550.0 million and (B) the Borrowing Base at the time such debt is incurred;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2A) the incurrence by the Issuer and any Subsidiary Guarantor of Indebtedness represented by the Notes (not including any guarantee thereof) and the exchange notes and related exchange guarantees to be issued in exchange for the Notes and the guarantees thereof pursuant to the Registration Rights Agreement (but excluding any Additional Notes), ) and (B) the incurrence by the Issuer and any Subsidiary Guarantor of the Senior Subordinated Notes (including any Guarantee of the Notesguarantee thereof);
(3iii) Indebtedness of the Company, the Issuer and their its Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b)) and for purposes of clause (xiii) below, (vii) through (ix) and any of the Issuer’s Floating Rate Notes due 2012 or 10 3/4 Senior Notes due 2013 outstanding on the Issue Date);
(4iv) Indebtedness (including Capitalized Lease Obligations), ) and Disqualified Stock incurred or issued by the Issuer or any Restricted Subsidiary and Preferred Stock incurred issued by the Company or any of its Restricted SubsidiariesSubsidiary, to finance the purchase, lease or improvement of property (real or personal) ), equipment or equipment other assets, including assets that is are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock incurred or issued and outstanding under this clause (4iv), not to exceed 4.0the greater of (A) $45.0 million and (B) 2.5% of Total Assets (in each case, determined at the date of incurrence) at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5v) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bank guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or created in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; provided, provided that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company Issuer or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) provided that such Indebtedness is not reflected on the balance sheet of the Company Issuer, or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will shall not be deemed to be reflected on such balance sheet for purposes of this clause (6) (avi)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause;
(8) viii) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)Subsidiary Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Subsidiary Guarantor; provided further provided, further, that any subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause;
(9ix) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its Restricted Subsidiaries) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred StockStock not permitted by this clause;
(10x) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to under this Section 4.09Indenture, exchange rate risk or commodity pricing risk;
(11xi) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Company Issuer or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business;
(12) (aA) Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any Restricted Subsidiary equal in an aggregate principal amount or liquidation preference up to 200.0100.0% of the net cash proceeds received by the Company Issuer since immediately after the Transaction Issue Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies Issuer or cash contributed to the capital of the Company Issuer (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company Issuer or any of its Subsidiaries) as determined in accordance with clauses (3)(BC)(2) and (3)(CC)(3) of Section 4.07(a4.07(a)(iv) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses clause (1a) and (3c) of the definition thereof) and (bB) Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, Issuer or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencepreference which, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(bxii)(B), does not at any one time outstanding exceed the greater of (x) $900.0 70.0 million and (y) 4.75% of Total Assets (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (bxii)(B) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(bxii)(B) but shall be deemed incurred for the purposes of Section 4.09(a) hereof the first paragraph of this covenant from and after the first date on which the Company Issuer or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a4.09(a) hereof without reliance on this clause (12)(bxii)(B));
(13xiii) the incurrence by the Company Issuer or any Restricted Subsidiary, Subsidiary of Indebtedness, the issuance by the Issuer or any Restricted Subsidiary of Disqualified Stock or the issuance by any Restricted Subsidiary of Preferred Stock which serves to extend, replace, refund, refinance, renew or defease any Indebtedness incurred or Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred issued as permitted under Section 4.09(a) hereof and clauses (2ii), (3iii), (4iv) and (12)(axii)(A) of this Section 4.09(b), this clause (13xiii) and clause clauses (14xiv) and (xxiv) of this Section 4.09(b) or any Indebtedness, Indebtedness incurred or Disqualified Stock or Preferred Stock issued to so refund extend, replace, refund, refinance, renew or refinance defease such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, provided that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded extended, replaced, refunded, refinanced, renewed or refinanced,defeased;
(B) to the extent such Refinancing Indebtedness refinances extends, replaces, refunds, refinances, renews or defeases (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee thereof at least to the same extent as the Indebtedness being refinanced extended, replaced, refunded, refinanced, renewed or refunded defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,; and
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i1) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Sources: Senior Secured Notes Indenture (American Tire Distributors Holdings, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company On and following the Effective Date, the Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) ), with respect to any Indebtedness (including Acquired Indebtedness) ), and the Company Issuer will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, provided that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company Issuer and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided further that the amount of Indebtedness (including Acquired Indebtedness) for borrowed money, Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors shall not (together with (x) any Refinancing Indebtedness in respect thereof incurred or issued by Restricted Subsidiaries that are not Guarantors and outstanding pursuant to clause Section 4.09(b)(13) and (y) the amount of Indebtedness for borrowed money, Disqualified Stock and Preferred Stock, incurred or issued by Restricted Subsidiaries that are not Guarantors pursuant to Section 4.09(b)(12)(b) and any Refinancing Indebtedness in respect thereof incurred or issued by Restricted Subsidiaries that are not Guarantors and outstanding pursuant to clause Section 4.09(b)(13)) exceed the greater of $700.0 million and 25% of EBITDA outstanding as of the time of any incurrence pursuant to this Section 4.09(a).
(b) The provisions of Section 4.09(a) hereof shall not apply to:
(1) the incurrence of (A) Indebtedness under Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Guarantor and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof); provided that, and immediately after giving effect to any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtednessincurrence or issuance, up to an the then-outstanding aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if of all Indebtedness incurred or issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) (including, for avoidance of doubt, clause (B) of this clause (1)) does not exceed the sum of (a) the greater of $2,100.0 million and 75% of EBITDA, plus (b) $6,000.0 million, plus (c) the maximum amount of Indebtedness such that, after giving pro forma effect to such incurrence (in a manner consistent with the calculation of the Fixed Charge Coverage Ratio), the Consolidated First Lien Debt Ratio of the Issuer does not exceed 2.75 to 1.00 (provided that, for purposes of determining the amount of Indebtedness that may be incurred pursuant to this subclause (c), all Indebtedness incurred pursuant to this clause (1) (including, for avoidance of doubt, clause (B) of this clause (1)) shall be deemed to be First Lien Debt) and (B) Indebtedness under Credit Facilities by the Issuer or any portion thereofGuarantor that serves to extend, the aggregate amount replace, refund, refinance, renew, or defease any Indebtedness originally incurred pursuant to clause (A) of this clause (1), including additional Indebtedness incurred or issued to pay premiums (including tender premiums), defeasance costs, and accrued interest, fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such extension, replacement, refunding, refinancing, renewal or defeasance;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Guarantee) (other than any Additional Notes), the Dollar Secured Notes (including any Guarantee of guarantee thereof) (other than any “Additional Notes” as defined in the Dollar Secured Notes Indenture) and the Unsecured Notes (including any guarantee thereof) (other than any “Additional Notes” as defined in the Unsecured Notes Indenture);
(3) Indebtedness of the Company, the Issuer and their its Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), ) incurred or Disqualified Stock and Preferred Stock incurred issued by the Company Issuer or any of its Restricted SubsidiariesSubsidiaries and Preferred Stock issued by any Restricted Subsidiary, to finance the purchaseacquisition, lease construction, repair, replacement, or improvement of property (real or personal) ), equipment, or equipment other fixed or capital assets that is are used or useful in a Similar Business; provided that such Indebtedness exists at the date of the applicable acquisition, whether through construction, repair, replacement, or improvement or is created within 365 days thereafter; provided, further that the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amountamount or liquidation preference of all such Indebtedness, Disqualified Stock or Preferred Stock, as applicable, incurred or issued pursuant to this clause (4), when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock, and Preferred Stock then outstanding and incurred pursuant to this clause (4), together with any Refinancing Indebtedness in respect thereof then outstanding and all other Indebtednessincurred pursuant to clause (13) below, Disqualified Stock and/or Preferred Stock issued and outstanding under does not as of the time of any incurrence pursuant to this clause (4), not to ) exceed 4.0the greater of $500.0 million and 18% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;EBITDA.
(5) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including letters of credit in respect of workers’ workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ workers compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company Issuer or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts earn-outs or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets assets, or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosed thereon)) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that that, if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosed thereon)) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another Restricted Subsidiary or any pledge of its Restricted Subsidiariessuch Preferred Stock constituting a Permitted Lien (but not foreclosed thereon)) shall be deemed in each case to be an issuance of such shares of Preferred StockStock not permitted by this clause (9);
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal appeal, and surety bonds and performance and completion guarantees and similar obligations provided by the Company Issuer or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees, or similar instruments related thereto, in each case, in the ordinary course of businessbusiness or consistent with past practice or industry practices;
(12) (a) Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock Stock, or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0100.0% of the net cash proceeds received by the Company since immediately Issuer after the Transaction Issue Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies Issuer or cash contributed to the capital of the Company Issuer (in each case, other than proceeds of Excluded Contributions or Disqualified Stock or sales of Equity Interests to the Company Issuer or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent hereof; provided, however, that (i) any such net cash proceeds received or cash have contributed shall not been applied pursuant to such clauses to make increase the amount available for making Restricted Payments to the extent any Indebtedness, Disqualified Stock or to make other Investments, payments Preferred Stock is issued or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments incurred in reliance on this clause (other than Permitted Investments specified in clauses (112)(a) and (3ii) any such net cash proceeds received or cash contributed that are applied to make any Restricted Payments shall be excluded for purposes of the definition thereof) incurring or issuing Indebtedness, Disqualified Stock or Preferred Stock pursuant to this clause (12)(a); and (b) Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock Stock, and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), together with any Refinancing Indebtedness in respect thereof then outstanding and incurred pursuant to clause (13) below, does not at any one time outstanding exceed the greater of $900.0 1,400.0 million and 50% of EBITDA; provided, that the amount of Indebtedness (it being understood that any including Acquired Indebtedness) for borrowed money, Disqualified Stock or Stock, and Preferred Stock that may be incurred or issued, as applicable, pursuant to this clause (1212)(b) by Restricted Subsidiaries that are not Guarantors shall not (btogether with (x) shall cease to be deemed any Refinancing Indebtedness in respect thereof incurred or issued by Restricted Subsidiaries that are not Guarantors and outstanding pursuant to clause (13) below and (y) the amount of Indebtedness for purposes borrowed money, Disqualified Stock and Preferred Stock, incurred or issued by Restricted Subsidiaries that are not Guarantors pursuant to Section 4.09(a) and any Refinancing Indebtedness in respect thereof incurred or issued by Restricted Subsidiaries that are not Guarantors and outstanding pursuant to clause (13) below) exceed the greater of $700.0 million and 25% of EBITDA outstanding at the time of any incurrence pursuant to this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company Issuer or any Restricted Subsidiary, Subsidiary of Indebtedness, Indebtedness or the issuance of Disqualified Stock or the issuance by any Restricted Subsidiary of Preferred Stock which serves to refund extend, replace, refund, refinance, renew, or refinance defease any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) ), and (12)(a12) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund extend, replace, refund, refinance, renew, or refinance defease such Indebtedness, Disqualified Stock Stock, or Preferred Stock including additional Indebtedness, Disqualified Stock Stock, or Preferred Stock incurred or issued to pay premiums (including reasonable tender premiums), defeasance costs and fees accrued interest, fees, and expenses in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, provided that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which that is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded extended, replaced, refunded, refinanced, renewed, or refinanceddefeased,
(B) to the extent such Refinancing Indebtedness refinances extends, replaces, refunds, refinances, renews or defeases (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee thereof at least to the same extent as the Indebtedness being refinanced extended, replaced, refunded, refinanced, renewed, or refunded defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(DC) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the IssuerGuarantor; or
(iii) Indebtedness or Disqualified Stock of the Issuer or Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock Stock, or Preferred Stock of an Unrestricted Subsidiary; and provided further that subclause
(A) of this clause (13) shall not apply to any extension, replacement, refunding, refinancing, renewal, or defeasance of Indebtedness that matures prior to the Notes;
(14) (x) Indebtedness or Disqualified Stock of the Issuer or Indebtedness, Disqualified Stock Stock, or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred or issued to finance an acquisition (or other purchase of assets), merger, or consolidation or (y) Indebtedness, Disqualified Stock, or Preferred Stock of Persons that are acquired by the Company Issuer or any Restricted Subsidiary or merged into or amalgamated consolidated with or into the Company Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that that, after giving effect to such acquisition, merger merger, or amalgamation consolidation, if more than $200.0 million of Indebtedness, Disqualified Stock, or Preferred Stock, together with any Refinancing Indebtedness in respect thereof incurred and outstanding pursuant to clause (13) above, is at any time outstanding under this clause (14), either
(A) the Company Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orCo
Appears in 1 contract
Sources: Indenture (Organon & Co.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (ai) The Company Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Borrower shall not permit any of its Restricted Subsidiary Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Borrower and any Restricted Subsidiary of the Borrower may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Debt to Adjusted EBITDA Ratio on a consolidated basis of the Borrower for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 be less than or equal to 8.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a10.1(a) hereof shall not apply to:to (collectively, “Permitted Debt”):
(1i) the incurrence Incurrence by the Borrower or its Restricted Subsidiaries of Indebtedness under any Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreements and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $4,000.0 million outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus ;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer and Borrower (and, if applicable, any Guarantor Guarantors) of Indebtedness represented by (a) the Loans and any Guarantees (including any Exchange Notes issued in exchange therefor and guarantees thereof), (b) the Senior PIK Loans and any guarantees thereof (including any exchange notes issued in exchange therefor and guarantees thereof), and (c) the Notes (and any guarantees thereof, the proceeds of which are used to refinance any Loans or Senior PIK Loans, but not including any Additional Notes), including any Guarantee Notes in excess of the Notesamount of Loans and Senior PIK Loans issued on the Closing Date together with all Senior PIK Loans issued as PIK Interest, in each case subject to the second sentence of Section 10.1(c);
(3iii) Indebtedness of the Company, the Issuer Borrower and their its Restricted Subsidiaries in existence existing on the Issue Date or Closing Date, including any Indebtedness Incurred on the Merger Closing Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b10.1(b));
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company Borrower or any of its Restricted Subsidiaries, Disqualified Stock issued by the Borrower or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Borrower to finance (whether prior to or within 270 days after) the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued and then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed 4.0the greater of (x) $450.0 million and (y) 4% of Total Assets at any time outstanding; so long as such Indebtedness exists of the Borrower at the date time of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company Borrower or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company Borrower or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the Transactions or the disposition of any business, assets or a SubsidiarySubsidiary of the Borrower in accordance with the terms of this Agreement, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company Borrower to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee obligations of the Notes of such GuarantorBorrower under the Loans; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Borrower or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Borrower or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to the Borrower or another Restricted Subsidiary; provided, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into other than for speculative purposes): (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Agreement to be incurred pursuant to this Section 4.09, outstanding or (2) for the purpose of fixing or hedging currency exchange rate risk or commodity pricing riskwith respect to any currency exchanges;
(11xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and bonds, completion guarantees and the Lockheed Note provided by the Company Borrower or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company Borrower or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) Borrower and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary of the Borrower not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencewhich, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed the greater of (x) $650.0 million and (y) 4% of Total Assets of the Borrower at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Incurred or issued under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a10.1(a) hereof from and after the first date on which the Company Borrower or such the Restricted Subsidiary Subsidiary, as the case may be, could have incurred Incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a10.1(a) hereof without reliance on upon this clause (12)(bxii));
(13xiii) the incurrence any guarantee by the Company Borrower or a Restricted Subsidiary of Indebtedness or other obligations of the Borrower or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness or other Obligations by the Borrower or such Restricted Subsidiary is permitted under the terms of this Agreement; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Loans or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of Indebtednesssuch guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Loans or such Guarantor’s Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Loans or the Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Borrower which serves to refund refund, refinance or refinance defease any Indebtedness, Indebtedness Incurred or Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a10.1(a) hereof and clauses (2ii), (3iii), (4iv), (xiv), (xv), (xix), (xx), (xxii) and (12)(axxiii) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b10.1(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock Stock, including additional any Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,refinanced and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that was due on or after the date one year following the Extended Maturity Date were instead due on such date one year following the Extended Maturity Date;
(B2) to the extent such Refinancing Indebtedness refinances (ia) Indebtedness subordinated or pari passu junior to the Notes or any Guarantee thereofLoans, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded Loans or (iib) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,;
(C3) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium and fees Incurred in connection with such refinancing;
(4) shall not include Indebtedness of the Borrower or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(5) in the case of any Refinancing Indebtedness in respect Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of Indebtedness under the Senior Credit Facilitiesthis Section 10.1(b), the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required deemed to have been Incurred and to be incurred substantially contemporaneously with the related refinancing outstanding under such clause (iv) or (xx) of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoingthis Section 10.1(b), as applicable, within 45 days following the incurrence and not this clause (xiv) for purposes of determining amounts outstanding under such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect clauses (iv) and (xx) of the Senior Credit Facilitiesthis Section 10.1(b); and provided, such Notesfurther, NXP Notes or Existing Secured Note, or Refinancing Indebtedness that subclause (1) of any of the foregoing, as applicable, and
this clause (Dxiv) shall not include:apply to any refunding, refinancing or defeasance of (A) the Loans or (B) any Secured Indebtedness;
(ixv) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Borrower or any of its Restricted Subsidiary Subsidiaries or merged or amalgamated into the Company Borrower or a Restricted Subsidiary in accordance with the terms of this IndentureAgreement; provided provided, however, that such Indebtedness, Disqualified Stock or Preferred Stock is not Incurred in contemplation of such acquisition, merger or amalgamation; provided, further, however, that after giving effect to such acquisition, merger or amalgamation amalgamation, either:
(A1) the Company Borrower would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Debt to Adjusted EBITDA Ratio test set forth in Section 4.09(a) hereof, 10.1(a); or
(B2) the Fixed Charge Coverage Debt to Adjusted EBITDA Ratio of the Company and the Restricted Subsidiaries is Borrower would be less than or equal to or greater than such ratio immediately prior to such acquisition, merger or amalgamation;
(15xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse (except for Standard Securitization Undertakings) to the Borrower or any Restricted Subsidiary other than a Receivables Subsidiary;
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five Business Days of its incurrenceIncurrence;
(16xviii) Indebtedness of the Company Borrower or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the any Credit FacilitiesAgreement, in a principal amount not in excess of the stated amount of such letter of creditcredit or bank guarantee;
(17xix) Contribution Indebtedness;
(xx) Indebtedness of Restricted Subsidiaries that are not Guarantors; provided, however, that the aggregate principal amount of Indebtedness Incurred under this Section 10.1(b) (Axx), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), does not exceed the greater of (x) $75.0 million and (y) 10% of the Total Assets of the Restricted Subsidiaries of Intelsat Sub Holdco that are not guarantors of any guarantee by Indebtedness of the Company Borrower;
(xxi) Indebtedness of the Borrower or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(xxii) Indebtedness of the Borrower or any of the Restricted Subsidiaries incurred to repurchase or refinance any Specified Existing Intelsat Corp Notes; and
(xxiii) Indebtedness of the Borrower or any of its Restricted Subsidiaries Incurred to repay, repurchase or refinance any of the Existing Subsidiary Notes or the Intelsat ▇▇▇▇▇▇▇ Unsecured Credit Agreement.
(c) For purposes of determining compliance with this Section 10.1, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of one or more of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in Sections 10.1(b)(i) through (xxiii) above or is entitled to be Incurred pursuant to Section 10.1(a), the Borrower shall, in its sole discretion divide, classify or reclassify or later divide, classify or reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock in any manner that complies with this Section 10.1 and such item of Indebtedness, Disqualified Stock or Preferred Stock shall be treated as the incurrence having been Incurred pursuant to one or more of such clauses or pursuant to Section 10.1(a); provided that all Indebtedness incurred by such Restricted Subsidiary is permitted under the terms Credit Agreements outstanding on the Closing Date shall be deemed to have been Incurred pursuant to Section 10.1(b)(i). Upon consummation of the ▇▇▇▇▇▇▇▇ Assignment, all Indebtedness of Intelsat Bermuda and its Restricted Subsidiaries outstanding on the Closing Date (other than Indebtedness described in clauses (i) and (ii) of Section 10.1(b)) shall be deemed to have been Incurred pursuant to Section 10.1(b)(iii). At no time during the period between initial funding of the Loans under this Agreement and the consummation of the ▇▇▇▇▇▇▇▇ Assignment shall the Initial Borrower be deemed to have Incurred the Existing Intelsat Notes. Accrual of interest, the accretion of accreted value, amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be deemed to be an Incurrence of Indebtedness for purposes of this Indenture, or
Appears in 1 contract
Sources: Senior Unsecured Bridge Loan Credit Agreement (Intelsat LTD)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Parent shall not, and shall not permit any of its Restricted Subsidiaries (including the Issuer) to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Parent shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or any Restricted Subsidiary that is not a Guarantor to issue Preferred Stock; provided, provided that the Company Parent may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and any Restricted Subsidiary that is not a Guarantor may issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company of Parent and its Restricted Subsidiaries’ Subsidiaries for the most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided that the then outstanding aggregate principal amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to this Section 4.09(a) (plus any Refinancing Indebtedness in respect thereof) by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (i) $605.0 million and (ii) 4.25% of Total Assets (determined on the date of such incurrence).
(b) The provisions of Section 4.09(a) hereof shall not apply to:
(1i) the incurrence of Indebtedness under incurred pursuant to any Credit Facilities by the Company, the Issuer Parent or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof); provided that immediately after giving effect to any such incurrence or issuance, and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an the then outstanding aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if of all Indebtedness incurred or issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1i) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingdoes not exceed $6,725.0 million;
(2ii) the incurrence by the Issuer Parent and any Guarantor of Indebtedness represented by the Notes (not including any guarantee thereof) and the Exchange Notes and related Guarantees thereof to be issued in exchange for the Notes and the Guarantees thereof pursuant to the Registration Rights Agreement (but excluding any Additional Notes), including any Guarantee of the Notes;
(3iii) Indebtedness of the Company, the Issuer Parent and their its Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b));
(4iv) Indebtedness (including consisting of Capitalized Lease Obligations), Disqualified Stock Obligations and Preferred Stock incurred by the Company or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets Purchase Money Obligations in an aggregate principal amount, amount (together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), thereof) not to exceed 4.0the greater of (i) $710.0 million and (ii) 5.0% of Total Assets (in each case, determined at any time outstandingthe date of incurrence or issuance); so long as such Indebtedness exists at the date of such purchase, lease or improvement improvement, or is created within 270 365 days thereafterthereafter (for the avoidance of doubt, the purchase date for any asset shall be the later of the date of completion of construction or installation and the beginning of the full productive use of such asset);
(5v) Indebtedness incurred by the Company Parent or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bank guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or created in the ordinary course of business, including letters of credit in favor of suppliers or trade creditors or in respect of workers’ compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; provided, provided that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days 45 Business Days following such drawing or incurrence;
(6vi) Indebtedness arising from (A) Permitted Intercompany Activities and (B) agreements of the Company Parent or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) provided that such Indebtedness is not reflected on the balance sheet of the Company Parent, or any of its Restricted Subsidiaries (contingent obligations Contingent Obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will shall not be deemed to be reflected on such balance sheet for purposes of this clause (6) (avi)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company Parent to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not the Issuer or a Subsidiary Guarantor is subordinated in right of payment to Parent’s Guarantee of the Notes (other than for the Issuer) avoidance of doubt, any such Indebtedness owing to a Restricted Subsidiary that is not the Issuer or a Subsidiary Guarantor shall be deemed to be expressly subordinated in right of payment to Parent’s Guarantee of the NotesNotes unless the terms of such Indebtedness expressly provide otherwise); provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Parent or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause (vii);
(8) viii) Indebtedness of a Restricted Subsidiary to the Company Parent or another Restricted Subsidiary; provided that if the Issuer or a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not the Issuer or a Guarantor (other than the Issuer)Subsidiary Guarantor, such Indebtedness is subordinated in right of payment to the Notes or such Subsidiary Guarantor’s Guarantee of the Notes (for the avoidance of doubt, any such Indebtedness owing to a Restricted Subsidiary that is not the Issuer or a Guarantor shall be deemed to be expressly subordinated in right of payment to the Notes or such Subsidiary Guarantor’s Guarantee of the Notes unless the terms of such GuarantorIndebtedness expressly provide otherwise); provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company Parent or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause (viii);
(9ix) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Parent or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Parent or another of its Restricted SubsidiariesSubsidiaries or any pledge of such Capital Stock constituting a Permitted Lien) shall be deemed in each case to be an issuance of such shares of Preferred StockStock (to the extent such Preferred Stock is then outstanding) not permitted by this clause (ix);
(10x) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to under this Section 4.09Indenture, exchange rate risk or commodity pricing risk;
(11xi) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Company Parent or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of businessbusiness or consistent with past practice;
(12xii) (aA) Indebtedness or Disqualified Stock of the Company Parent and Indebtedness, Disqualified Stock or Preferred Stock of the Company Parent or any Restricted Subsidiary equal in an aggregate principal amount or liquidation preference up to 200.0200% of the net cash proceeds received by Parent since the Company since immediately after the Transaction Existing Notes Issue Date from the issue or sale of Equity Interests of the Company Parent or any of its direct or indirect parent companies company of Parent or cash contributed to the capital of the Company Parent (in each case, other than Excluded Contributions, proceeds of Disqualified Stock or sales of Equity Interests to the Company Parent or any of its Subsidiaries) as determined in accordance with clauses (3)(BC)(2) and (3)(CC)(3) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1h), (k), (m), (bb) and or (3cc) of the definition thereof) , and (bB) Indebtedness or Disqualified Stock of the Company Parent and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, Parent or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which which, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(bxii)(B), does not at any one time outstanding exceed the greater of (x) $900.0 800.0 million and (y) 4.0% of Total Assets (in each case, determined on the date of such incurrence); it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (bxii)(B) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(bxii)(B) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company Parent or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a4.09(a) hereof without reliance on this clause (12)(b)xii)(B);
(13xiii) the incurrence or issuance by the Company Parent or any Restricted Subsidiary, Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund extend, replace, refund, refinance, renew or refinance defease any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued as permitted under Section 4.09(a) hereof and clauses (2ii), (3iii), (4iv) and (12)(axii)(A) of this Section 4.09(b), this clause (13xiii) and clause (14xiv) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to so refund extend, replace, refund, refinance, renew or refinance defease such Indebtedness, Disqualified Stock or Preferred Stock including Stock, including, in each case, additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs costs, and accrued interest, fees and expenses in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, provided that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded extended, replaced, refunded, refinanced, renewed or refinanced,defeased (or requires no or nominal payments in cash prior to the date that is 91 days after the maturity date of the Notes);
(B) to the extent such Refinancing Indebtedness refinances extends, replaces, refunds, refinances, renews or defeases (i) Indebtedness subordinated or pari passu in right of payment to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu in right of payment to the Notes or the Guarantee thereof at least to the same extent as the Indebtedness being refinanced extended, replaced, refunded, refinanced, renewed or refunded defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,; and
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i1) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Parent that is not the Issuer or a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the IssuerParent;
(ii2) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Parent that is not the Issuer or a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the IssuerSubsidiary Guarantor; or
(iii3) Indebtedness or Disqualified Stock of Parent or Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; and, provided, further, that subclause (A) of this clause (xiii) will not apply to (x) any extension, replacement, refunding, refinancing, renewal or defeasance of any Credit Facilities, Secured Indebtedness or Indebtedness incurred pursuant to clause (iv) above or (y) an aggregate amount of Indebtedness not exceed $1,000.0 million at any time outstanding that otherwise qualifies as “Refinancing Indebtedness” as defined herein;
(14xiv) (A) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, Parent or a Restricted Subsidiary incurred or issued to finance an acquisition (or other purchase of assets) or (yB) Indebtedness, Disqualified Stock or Preferred Stock of Persons that are acquired by the Company Parent or any Restricted Subsidiary or merged into or amalgamated into the Company consolidated with Parent or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that in the case of clauses (A) and (B), after giving effect to such acquisition, merger merger, amalgamation or amalgamation either
consolidation (A1) the Company aggregate amount of such Indebtedness does not exceed $100.0 million at any time outstanding or (2) either (x) Parent would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
or (By) the Fixed Charge Coverage Ratio of the Company for Parent and the its Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger merger, amalgamation or amalgamationconsolidation;
(15xv) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16xvi) Indebtedness of the Company Parent or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17xvii) (A) any guarantee by the Company Parent or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or; and
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Company shall not permit any of its Restricted Subsidiary Subsidiaries (other than a Guarantor) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of the Company for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $805 million outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus ;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer Issuers and any Guarantor the Guarantors of Indebtedness represented by (i) the Original Securities (not including any Additional Securities) and the Guarantees, as applicable (including the Exchange Securities and guarantees thereof) and (ii) the Existing 2014 Notes (not including any Additional additional 9 1/2% Senior Notes due 2014 issued under the terms of the indenture governing the Existing 2014 Notes) and the related guarantees thereof (including Exchange Existing 2014 Notes and related guarantees thereof), (iii) the 2016 Notes (not including any Guarantee additional 8 7/8% Senior Notes due 2016 issued under the terms of the indenture governing the 2016 Notes) and the related guarantees thereof (including Exchange 2016 Notes and related guarantees thereof), and (iv) the Existing Senior Subordinated Notes (not including any additional 11 3/4% Senior Subordinated Notes due 2016 issued under the terms of the indenture governing the Existing Senior Subordinated Notes) and the related guarantees thereof (including Exchange Existing Senior Subordinated Notes and related guarantees thereof);
(3iii) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b));
(4a) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company to finance (whether prior to or within 270 days after) the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued and then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed the greater of $75.0 million and 4.0% of Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the Apollo Transactions or any other acquisition or disposition of any business, assets or a SubsidiarySubsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing owed to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notesobligations of the Company under the Securities; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence Incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into that are not incurred for speculative purposespurposes and either: (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases or sales;
(11xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amount or liquidation preferenceamount, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed $100.0 million at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Indebtedness Incurred under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which the Company, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii));
(xiii) any guarantee by the Company or a Guarantor of Indebtedness or other obligations of the Company or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by the Company or such Restricted Subsidiary could have incurred is permitted under the terms of this Indenture; provided that if such IndebtednessIndebtedness is by its express terms subordinated in right of payment to the Securities or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of such Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantor’s Guarantee with respect to the Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by of a Restricted Subsidiary of the Company which serves to refund, refinance or defease any Restricted Subsidiary, of Indebtedness, Indebtedness Incurred or Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred issued as permitted under Section 4.09(a4.03(a) hereof and clauses (2ii), (3iii), (4iv), (xiv), (xv), (xix) and (12)(axx) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock Stock, including additional any Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,refinanced and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date one year following the last maturity date of any Securities then outstanding were instead due on such date one year following the last date of maturity of the Securities;
(B2) has a Stated Maturity which is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or (y) 91 days following the last maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (ia) Indebtedness subordinated equal to or pari passu junior to the Notes Securities or any the Guarantee thereofof such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is subordinated equal to or pari passu junior, as applicable, to the Notes Securities or the Guarantee at least to the same extent of such Restricted Subsidiary, as the Indebtedness being refinanced or refunded applicable, or (iib) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,;
(C4) is Incurred in an aggregate amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium, fees and expenses Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is not a Guarantor that refinances Indebtedness of the Company or a Restricted Subsidiary that is a Guarantor, or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(6) in the case of any Refinancing Indebtedness in respect Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of Indebtedness under the Senior Credit Facilitiesthis Section 4.03(b), the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required deemed to have been Incurred and to be incurred substantially contemporaneously with the related refinancing outstanding under such clause (iv) or (xx) of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoingthis Section 4.03(b), as applicable, within 45 days following the incurrence and not this clause (xiv) for purposes of determining amounts outstanding under such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect clauses (iv) or (xix) of the Senior Credit Facilitiesthis Section 4.03(b); provided, such Notesfurther, NXP Notes or Existing Secured Note, or Refinancing Indebtedness that subclauses (1) and (2) of any of the foregoing, as applicable, and
this clause (Dxiv) shall not include:apply to any refunding or refinancing of any Bank Indebtedness;
(ixv) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any of its Restricted Subsidiary Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided provided, however, that such Indebtedness, Disqualified Stock or Preferred Stock is not Incurred in contemplation of such acquisition, merger or amalgamation or to provide all or a portion of the funds or credit support required to consummate such acquisition, merger or amalgamation; provided, further, however, that after giving effect to such acquisition, merger or amalgamation acquisition and the Incurrence of such Indebtedness either:
(A1) the Company would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in the first sentence of Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or would be greater than immediately prior to such acquisition, merger or amalgamation;
(15xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five Business Days of its incurrenceIncurrence;
(16xviii) Indebtedness of the Company or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit FacilitiesAgreement, in a principal amount not in excess of the stated amount of such letter of credit;
(17xix) Contribution Indebtedness;
(Axx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) Indebtedness of the Company or any guarantee Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and
(xxii) Indebtedness consisting of customary indemnification, adjustment of purchase price or similar obligations of the Company or any Restricted Subsidiary, in each case Incurred in connection with the acquisition or disposition of any assets by the Company or a any Restricted Subsidiary Subsidiary. For purposes of determining compliance with this Section 4.03, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xxii) above or is entitled to be Incurred pursuant to Section 4.03(a), the Issuers shall, in their sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness in any manner that complies with this Section 4.03; provided that all Indebtedness under the Credit Agreement outstanding on the Issue Date shall be deemed to have been Incurred pursuant to clause (i) of Section 4.03(b) and the Issuers shall not be permitted to reclassify all or other obligations of any Restricted Subsidiary so long as the incurrence portion of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms Credit Agreement outstanding on the Issue Date. Accrual of this Indentureinterest, orthe accretion of accreted value, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be deemed
Appears in 1 contract
Sources: Indenture (RBS Global Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, provided that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to clause (c) of this Section 4.09(c) hereof4.09, any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for Holdings, the Company and its Restricted SubsidiariesSubsidiaries for Holdings’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 2.0 to 1.00 (the “Fixed Charge Coverage Test”)1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof shall will not apply to:
(1) the incurrence by the Company or any Restricted Subsidiary that is a Guarantor of Indebtedness under pursuant to Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing4,265,000,000;
(2) the incurrence by the Issuer Company and any Subsidiary Guarantor of Indebtedness represented by the Notes issued on the Issue Date and any replacement Notes therefor (not including any Additional Notes), including any Guarantee of the Notesthereof);
(3) Indebtedness of the Company, the Issuer Company and their its Restricted Subsidiaries in existence on the Issue Date or Date, including the Merger Date Secured Notes and Exchangeable Notes (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) (i) Indebtedness (including Capitalized Lease Obligations), ) and Disqualified Stock and Preferred Stock incurred or issued by the Company or any of its Restricted SubsidiariesSubsidiary and Preferred Stock issued by any Restricted Subsidiary, to finance the purchase, lease or improvement of property (real or personal) ), equipment or equipment other assets that is in each case are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and (ii) Indebtedness arising under Capitalized Leases other than those in effect on the Issue Date or entered into pursuant to subclause (i) of this clause (4), in an aggregate principal amount, together with any Refinancing refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or or Preferred Stock incurred or issued and outstanding under this clause (4), not to exceed 4.0the greater of (a) $150,000,000 and (b) 3.0% of Total Assets (in each case, determined at the date of incurrence) at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bank guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or created in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; provided, provided that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts earn-outs or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)Subsidiary Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Subsidiary Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted Subsidiaries) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred StockStock not permitted by this clause (9);
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to under this Section 4.09Indenture, exchange rate risk or commodity pricing risk;
(11) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Company or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal that is a Guarantor in an aggregate principal amount or liquidation preference up to 200.0200% of the net cash proceeds received by the Company since immediately after the Transaction Date May 9, 2012 from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B3)(C) and (3)(C3)(D) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses or, in the case of proceeds received prior to the Issue Date, clause (3)(A) of Section 4.07(a) hereof to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Sources: Indenture (Sabre Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company (i) Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) Holdings shall not permit any of its Restricted Subsidiary Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and Holdings and any Restricted Subsidiary that is a Guarantor may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and the Company and Holdings and any Restricted Subsidiary that is a Guarantor may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of Holdings for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by Holdings or its Restricted Subsidiaries of Indebtedness under the Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $1,950 million outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus ;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer Company and any Guarantor the Guarantors of Indebtedness represented by the Notes (not including any Additional Notes)Original Securities and the Guarantees, including any Guarantee of the Notesas applicable;
(3iii) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b));
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company Holdings or any of its Restricted Subsidiaries, Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and Indebtedness then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed 4.03% of Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company Holdings or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtednesscredit, such obligations are reimbursed within 30 days following such drawing or incurrencedrawing;
(6vi) Indebtedness arising from agreements of the Company Holdings or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the disposition of any business, assets or a SubsidiarySubsidiary of Holdings in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company Holdings to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notesobligations of Holdings under its Guarantee; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Holdings or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to Holdings or another Restricted Subsidiary; provided that (1) any such Indebtedness is made pursuant to an intercompany note and (2) if a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary lending such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are Incurred in the ordinary course of business (excluding Hedging Obligations entered into and not for speculative purposes): (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases;
(11xi) obligations in respect of performance, bid, appeal bid and surety bonds and completion guarantees provided by the Company Holdings or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company Holdings or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary Holdings not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencewhich, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed $175 million at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Indebtedness Incurred under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which Holdings, or the Company or such Restricted Subsidiary Subsidiary, as the case may be, could have incurred Incurred such Indebtedness, Disqualified Stock or Preferred Stock Indebtedness under Section 4.09 (a4.03(a) hereof without reliance on upon this clause (12)(bxii));
(13xiii) the incurrence any guarantee by the Company or a Guarantor of Indebtedness or other obligations of Holdings or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by Holdings or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Securities or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of Indebtednesssuch Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantor’s Guarantee with respect to the Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Guarantee of such Restricted Subsidiary, Disqualified Stock as applicable;
(xiv) the Incurrence by Holdings or Preferred Stock any of its Restricted Subsidiaries of Indebtedness which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred Indebtedness Incurred as permitted under Section 4.09(a4.03(a) hereof and clauses (2ii), (3iii), (4iv), (xv) and (12)(axx) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock Indebtedness issued to so refund or refinance such IndebtednessIndebtedness (subject to the following proviso, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock Indebtedness being refunded or refinanced,;
(B2) has a Stated Maturity which is no earlier than the Stated Maturity of the Indebtedness being refunded or refinanced;
(3) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu junior to the Notes Securities or any the Guarantee thereofof such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes Securities or the Guarantee at least of such Restricted Subsidiary, as applicable;
(4) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the same extent as aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium and fees Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of Holdings that is not the Company or refunded a Guarantor that refinances Indebtedness of the Company or a Guarantor, or (iiy) Disqualified Stock Indebtedness of Holdings or Preferred Stock, such Refinancing a Restricted Subsidiary that refinances Indebtedness must be Disqualified Stock or Preferred Stock, respectively,of an Unrestricted Subsidiary; and
(C6) in the case of any Refinancing Indebtedness in respect Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of Indebtedness under the Senior Credit Facilitiesthis Section 4.03(b), the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required deemed to have been Incurred and to be incurred substantially contemporaneously with the related refinancing outstanding under such clause (iv) or (xx) of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoingthis Section 4.03(b), as applicable, within 45 days following the incurrence and not this clause (xiv) for purposes of determining amounts outstanding under such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect clauses (iv) and (xx) of the Senior Credit Facilitiesthis Section 4.03(b); provided, such Notesfurther, NXP Notes or Existing Secured Note, or Refinancing Indebtedness that subclauses (1) and (2) of any of the foregoing, as applicable, and
this clause (Dxiv) shall not include:
(i) apply to any refunding or refinancing of any Secured Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(iixv) Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Holdings or any of its Restricted Subsidiary Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided provided, however, that such Indebtedness or Disqualified Stock is not Incurred in contemplation of such acquisition or merger or to provide all or a portion of the funds or credit support required to consummate such acquisition or merger; provided, further, however, that after giving effect to such acquisition, merger or amalgamation acquisition and the Incurrence of such Indebtedness either:
(A1) the Company Holdings would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or would be greater than immediately prior to such acquisition, merger or amalgamation;
(15xvi) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five two Business Days of its incurrenceIncurrence;
(16xvii) Indebtedness of the Company Holdings or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit issued pursuant to the Senior Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17xviii) Contribution Indebtedness;
(Axix) any guarantee by Indebtedness of Foreign Subsidiaries not otherwise permitted hereunder, provided, however, that the Company or a Restricted Subsidiary aggregate principal amount of Indebtedness Incurred under this clause (xix), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xix), does not exceed the greater of (x) $250 million and (y) 10% of the consolidated assets of the Foreign Subsidiaries; and
(xx) Indebtedness of Holdings or other obligations of any Restricted Subsidiary so long consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business.
(c) Notwithstanding the foregoing, neither the Company nor any Guarantor may Incur any Indebtedness pursuant to Section 4.03(b) if the proceeds thereof are used, directly or indirectly, to repay, prepay, redeem, defease, retire, refund or refinance any Subordinated Indebtedness unless such Indebtedness shall be subordinated to the Securities or such Guarantor’s Guarantee, as applicable, to at least the same extent as such Subordinated Indebtedness. For purposes of determining compliance with this Section 4.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xx) above or is entitled to be Incurred pursuant to Section 4.03(a), Holdings shall, in its sole discretion, classify or reclassify such item of Indebtedness in any manner that complies with this Section 4.03 and such item of Indebtedness shall be treated as having been Incurred pursuant to only one of such clauses or pursuant to Section 4.03(a); provided that all Indebtedness under the Senior Credit Facilities outstanding on the Issue Date shall be deemed to have been Incurred pursuant to clause (i) and Holdings shall not be permitted to reclassify all or any portion of such Indebtedness. Accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.03. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which are otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of case may be, was in compliance with this Indenture, orSection 4.03.
Appears in 1 contract
Sources: Indenture (Nalco Holding CO)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) ), and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Consolidated Fixed Charge Coverage Ratio on a consolidated basis for the Company Issuer and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 1.75 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a4.10(a) hereof shall not apply to:to (collectively, “Permitted Indebtedness”):
(1) the incurrence by the Issuer or a Restricted Subsidiary of Indebtedness under Credit Facilities together with the incurrence by the Company, the Issuer or any other Restricted Subsidiary of the guarantees thereunder and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one timeamount, when taken together with equal to (x) the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (i) $5,250.0 3,200 million, which represents the approximate aggregate amount permitted to be borrowed under the revolving credit tranches of the Existing Credit Facilities, including under any “incremental facilities” and (ii) the Borrowing Base at the time of incurrence, plus (iiy) €750.0 $1,500 million, plus which represents the approximate aggregate amount under the term loan tranches of the Existing Credit Facilities, including certain additional term loan capacity permitted under the Delaware Indenture (iiithe “Existing Term Facilities”) less, in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereofy), the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred all mandatory principal payments or repurchases actually made by the borrower thereunder in connection respect of Indebtedness thereunder with such refinancingthe net proceeds from asset sales;
(2) the incurrence by Indebtedness of the Issuer and any Guarantor its Restricted Subsidiaries in respect of Indebtedness represented by the Notes issued on the Issue Date (not including any Additional Exchange Notes), including any Guarantee of the Notes;
(3) and other Indebtedness of the Company, the Issuer and their Subsidiaries in existence on the Issue Date or the Merger Date (other than including Capitalized Lease Obligations, but excluding Indebtedness under Existing Credit Facilities described in clauses (1Section 4.10(b)(1) and (2) of this Section 4.09(b)hereof);
(43) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and or Preferred Stock incurred by the Company Issuer or any of its Restricted Subsidiaries, Subsidiary to finance the purchase, lease lease, construction, or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, Permitted Business (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) in an aggregate principal amountamount that, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or Preferred Stock issued then outstanding and outstanding under incurred pursuant to this clause (4), 3) does not to exceed 4.0the greater of (x) $400.0 million and (y) 5% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterAssets;
(54) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries Subsidiary constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; provided, provided that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(65) Indebtedness arising from agreements of the Company Issuer or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts earn-outs or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; providedprovided that in the case of a disposition, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of such non-cash noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company Issuer and its any Restricted Subsidiaries in connection with such a disposition;
(76) Indebtedness of the Company Issuer owed to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by the Issuer or any other Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another a Restricted Subsidiary) shall be deemed, in each case, to be an constitute the incurrence of such IndebtednessIndebtedness by the issuer thereof;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(97) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its a Restricted SubsidiariesSubsidiary) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(10) 8) Hedging Obligations of the Issuer or any Restricted Subsidiary (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting limiting, hedging or managing (A) interest rate risk rates with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09outstanding, (B) currency exchange rate risk rates or (C) commodity pricing riskprices or otherwise entered into in the ordinary course of business (in each case, including Hedging Obligations on behalf of the Issuer or any Subsidiary of the Issuer);
(119) self insurance and obligations in respect of performance, bid, appeal and surety bonds, appeal bonds and other similar types of bonds and performance and completion guarantees and similar obligations provided by the Company Issuer or any Restricted Subsidiary or obligations in respect of its Restricted Subsidiaries letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of businessbusiness or consistent with past practice;
(12) (a10) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock Issuer or any Restricted Subsidiary or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencepreference which, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b10), does not at any one time outstanding exceed $900.0 million (it being understood 250.0 million; provided that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b10) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b10) but shall be deemed incurred for the purposes of Section 4.09(a4.10(a) hereof from and after on the first date on which after the Company date of incurrence of such Indebtedness that the Issuer or such Restricted Subsidiary could have incurred would be permitted to incur such Indebtedness, Disqualified Stock or Preferred Stock under pursuant to such Section 4.09 (a) hereof without reliance on this clause (12)(b)4.10(a);
(1311) any guarantee by the Issuer or a Restricted Subsidiary of Indebtedness or other obligations of the Issuer or any Restricted Subsidiary so long as the incurrence of such Indebtedness or other obligations incurred by the Issuer or such Restricted Subsidiary is permitted under the terms of this Indenture;
(12) the incurrence or issuance by the Company Issuer or any Restricted Subsidiary, Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which that serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued as permitted under Section 4.09(a4.10(a) hereof and clauses (2), (3), (4Section 4.10(b)(2) and (12)(a) of this Section 4.09(b)hereof, this clause (1312) and clause clauses (1420), (21) of this Section 4.09(band (22) below or any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock Stock, including additional Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to pay accrued interest, premiums (including reasonable tender premiums), defeasance costs and fees and expenses in connection therewith prior to its respective maturity (it being understood that Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any Restricted Subsidiary may be refunded or refinanced by Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any Restricted Subsidiary) (the “Refinancing Indebtedness”) prior to its respective maturity); provided, provided that such Refinancing Indebtedness:
Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
, (B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances include Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary, and (C) shall not be in a principal amount in excess of the principal amount of, premium, if any, accrued interest on, and related fees and expenses of, the Indebtedness being refunded or refinanced;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(1513) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business;
(14) Indebtedness consisting of promissory notes issued by the Issuer or any Restricted Subsidiary to current or former officers, provided that such Indebtedness is extinguished within five Business Days directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of the Issuer or any of its incurrencedirect or indirect parent companies permitted by Section 4.07 hereof;
(15) Indebtedness of the Issuer or any Restricted Subsidiary consisting of the financing of insurance premiums in the ordinary course of business or take or pay obligations contained in supply agreements incurred in the ordinary course of business;
(16) Indebtedness of the Company Issuer or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the any Credit FacilitiesFacility, in a principal amount not in excess of the stated amount of such letter of credit;
(17) Indebtedness consisting of deferred purchase price or notes issued to officers, directors and employees of Restricted Subsidiaries to purchase or redeem equity interests (Aor option or warrants or similar instruments) any guarantee by of the Company Issuer or a Restricted Subsidiary;
(18) Indebtedness issued as consideration for the repurchase or redemption of Capital Stock (other than Disqualified Stock) of Issuer in transactions to repurchase or redeem Capital Stock (other than Disqualified Stock) of Issuer (or its direct parent company) held by officers, directors or employees or former officers, directors or employees (or their transferees, estates or beneficiaries under their estates) of Issuer or any Subsidiary thereof, upon their death, disability, retirement, severance or termination of Indebtedness employment or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is service;
(19) guarantees constituting Investments permitted under the terms of this Indenture;
(20) Indebtedness or Disqualified Stock of the Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Restricted Subsidiary in an aggregate principal amount or liquidation preference equal to 100% of the net cash proceeds received by the Issuer and the Restricted Subsidiaries since immediately after the Issue Date from the issue or sale of Equity Interests of the Issuer or cash contributed to the capital of the Issuer or any direct or indirect parent of the Issuer (which proceeds are contributed to the Issuer) (in each case, other than Excluded Contributions or proceeds of Disqualified Stock or sales of Equity Interests to or any contribution received from any Restricted Subsidiary) as determined in accordance with clauses (3)(b) and (3)(e) of Section 4.07(a)(III) hereof;
(21) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Issuer or a Restricted Subsidiary incurred or assumed to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, either
(a) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in Section 4.10(a); or
(b) the Consolidated Fixed Charge Coverage Ratio is equal to or higher than immediately prior to such acquisition or merger; and
(22) Indebtedness or Disqualified Stock of Toys-Delaware and Indebtedness, Disqualified Stock or Preferred Stock of any of Toys-Delaware’s Subsidiaries that are Restricted Subsidiaries permitted under the fixed charge coverage ratio calculation set forth in Section 4.10(a) of the Delaware Indenture as in effect on the Issue Date; provided that the net proceeds of such incurrence of Indebtedness or issuance of Disqualified Stock or Preferred Stock are not used to make an Investment in any Person that is not the Issuer or a Restricted Subsidiary of the Issuer. For purposes of determining compliance with this Section 4.10, in the event that an item of proposed Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of Permitted Indebtedness pursuant to clauses (1) through (22) of Section 4.10(b) hereof, or is entitled to be incurred pursuant to Section 4.10(a) hereof, the Issuer, in its sole discretion, shall be permitted to classify and later reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock in any manner that complies with this Section 4.10; and such item of Indebtedness, Disqualified Stock or Preferred Stock will be treated as having been incurred pursuant to only one of such categories; provided, that all Indebtedness outstanding under the Existing Credit Facilities on the Issue Date will be treated as incurred under clause (1) of Section 4.10(b) and all Indebtedness under the Existing Term Facilities (and any refinancings thereof to the extent not in excess of the amount of the Existing Term Facilities outstanding on the Issue Date) shall at all times be deemed to be outstanding pursuant to clause (1) of this Section 4.10(b). Accrual of interest or dividends, the accretion of accreted value and the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness, Disqualified Stock or Preferred Stock, as applicable, for purposes of this Section 4.10. For purposes of determining compliance with any U.S. dollar restriction on the incurrence of Indebtedness where the Indebtedness incurred is denominated in a different currency, the amount of such Indebtedness will be the U.S. dollar equivalent determined on the date of the incurrence of such Indebtedness; provided that if any such Indebtedness denominated in a different currenc
Appears in 1 contract
Sources: Indenture (Toys R Us Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly indirectly, liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company Issuer will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, provided that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)if, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter periodTest Period, the Fixed Charge Coverage Ratio of the Issuer for the Issuer’s most recently ended Test Period preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued (or, in the case of Indebtedness under Designated Revolving Commitments, on the date such Designated Revolving Commitments are established after giving pro forma effect to the incurrence of the entire committed amount of Indebtedness thereunder, in which case such committed amount under such Designated Revolving Commitments may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this proviso) would have been at least 2.00 to 1.00; provided that the amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors under this Section 4.09(a) shall not exceed at any one time outstanding, in the aggregate, (together with all Indebtedness incurred under clause (22) below by Restricted Subsidiaries of the Issuer that are not Guarantors) the greater of (x) $300.0 million and (y) 35.0% of Consolidated EBITDA of the Issuer for the most recently ended Test Period (calculated on a pro forma basis).
(b) The provisions of Section 4.09(a) hereof shall will not apply to:
(1) the incurrence of Indebtedness under pursuant to Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness ) in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with not to exceed the aggregate principal amount sum of:
(or, if issued with original issue discount, A) the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (i) $5,250.0 million, plus 1,050.0 million and (ii) €750.0 millionthe Borrowing Base as of, plus (iii) at the option of the Issuer or such Restricted Subsidiary, the date of execution of the documentation governing such Indebtedness or the date of the incurrence of such Indebtedness or, in the case of any refinancing Limited Condition Transaction, the date of execution of the commitment letter in respect of such Indebtedness and measured on a pro forma basis after giving effect to any increase in the Borrowing Base that will result from such acquisition; plus
(B) $2,960.0 million; plus
(C) unlimited amounts, so long as in the case of this clause (C) only, after giving pro forma effect thereto, the Senior Secured Net Leverage Ratio as of the most recently ended Test Period shall be no greater than 3.25 to 1.00 (provided that for purposes of determining the amount that may be incurred under this clause (1)(C), any cash proceeds of any new Indebtedness permitted then being incurred shall not be netted from the numerator in the Senior Secured Net Leverage Ratio for purposes of calculating the Senior Secured Net Leverage Ratio under this clause (1)(C) for purposes of determining whether such Indebtedness can be incurred); provided that any Indebtedness incurred under this Section 4.09(b)(1) may be extended, replaced, refunded, refinanced, renewed or defeased (including through successive extensions, replacements, refundings, refinancings, renewals and defeasances) with new Indebtedness so long as the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the sum of (x) the principal amount (or accreted value, if applicable) of the Indebtedness being so extended, replaced, refunded, refinanced, renewed or defeased (and with respect to Indebtedness under Designated Revolving Commitments, including an amount equal to any unutilized Designated Revolving Commitments being refinanced to the extent permanently terminated at the time of incurrence of such Refinancing Indebtedness), plus (y) any accrued and unpaid interest on the Indebtedness being refinanced, plus (z) the amount of any tender premium or penalty or premium required to be paid under the terms of the instrument or documents governing such refinanced Indebtedness and any defeasance costs and any fees and expenses (including original issue discount, up‑front fees, underwriting, arrangement and similar fees) incurred in connection with the incurrence of such new Indebtedness or the extension, replacement, refunding, refinancing, renewal or defeasance of such refinanced Indebtedness; provided further that for purposes of determining the amount that may be incurred under this clause (1), all Indebtedness incurred under this clause (1) or any portion thereof, shall be deemed to be included in clause (a) of the aggregate amount definition of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing“Senior Secured Net Leverage Ratio”;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes and related Guarantees (not including but excluding any Additional NotesNotes issued after the Issue Date), including any Guarantee of the Notes;
(3) the incurrence of Indebtedness of the Company, by the Issuer and their Subsidiaries any Restricted Subsidiary in existence on the Issue Date or the Merger Date (other than excluding Indebtedness described in clauses (1Sections 4.09(b)(1) and (2) of this Section 4.09(b));
(4) (x)(a) the incurrence of Attributable Indebtedness and (b) Indebtedness (including Capitalized Lease Obligations and Purchase Money Obligations), ) and Disqualified Stock incurred or issued by the Issuer or any Restricted Subsidiary and Preferred Stock incurred issued by the Company or any of its Restricted Subsidiaries, Subsidiary to finance the purchase, lease lease, expansion, construction, installation, replacement, repair or improvement of property (real or personal) ), equipment or equipment other assets, including assets that is are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock incurred or issued and outstanding under this clause (4)) at such time, not to exceed 4.0(as of the date such Indebtedness, Disqualified Stock and/or Preferred Stock is issued, incurred or otherwise obtained) the greater of (x) $200.0 million and (y) 25.0% of Total Assets at Consolidated EBITDA of the Issuer and the Restricted Subsidiaries for the most recently ended Test Period (calculated on a pro forma basis) and (y) any time outstanding; so long as such Refinancing Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterin respect thereof;
(5) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries Subsidiary (a) constituting reimbursement obligations with respect to letters of credit credit, bank guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of businessbusiness or consistent with industry practice and otherwise in compliance with the terms of this Indenture, including letters of credit in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, unemployment insurance or other social security legislation or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims; provided, that upon the drawing performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or (b) as an account party in respect of such letters of credit credit, bank guarantees or similar instruments in favor of suppliers, trade creditors or other Persons issued or incurred in the incurrence ordinary course of such Indebtedness, such obligations are reimbursed within 30 days following such drawing business or incurrenceconsistent with industry practice;
(6) the incurrence of Indebtedness arising from agreements of the Company Issuer or its any Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) the incurrence of Indebtedness of by the Company Issuer and owing to a Restricted Subsidiary or the issuance of Disqualified Stock of the Issuer to a Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to any Restricted Subsidiary); provided that any such Indebtedness for borrowed money owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the NotesNotes to the extent permitted by applicable law; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness or Disqualified Stock (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness or Disqualified Stock constituting a Permitted Lien) shall will be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness (to the extent such Indebtedness is then outstanding) or issuance of such Disqualified Stock (to the extent such Disqualified Stock is then outstanding) not permitted by this clause (7);
(8) the incurrence of Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Issuer or any Restricted Subsidiary); provided that if any such Indebtedness for borrowed money incurred by a Guarantor incurs such Indebtedness and owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such GuarantorGuarantor to the extent permitted by applicable law; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any such subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien) will be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause (8);
(9) the issuance of shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Issuer or any Restricted Subsidiary); provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary that holds such Preferred Stock or Disqualified Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock or Disqualified Stock (except to the Company Issuer or another Restricted Subsidiary or any pledge of its Restricted Subsidiariessuch Preferred Stock or Disqualified Stock constituting a Permitted Lien) shall will be deemed deemed, in each case case, to be an issuance of such shares of Preferred StockStock or Disqualified Stock (to the extent such Preferred Stock or Disqualified Stock is then outstanding) not permitted by this clause (9);
(10) the incurrence of Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk);
(11) the incurrence of obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance, banker’s acceptance facilities and completion guarantees and similar obligations provided by the Company Issuer or any Restricted Subsidiary or obligations in respect of its Restricted Subsidiaries letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of businessbusiness or consistent with industry practice, including those incurred to secure health, safety and environmental obligations;
(12) (a) the incurrence of Indebtedness or issuance of Disqualified Stock of the Company Issuer and the incurrence or issuance of Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal in an aggregate principal amount or liquidation preference up to 200.0100.0% of the net cash proceeds received by the Company Issuer and its Restricted Subsidiaries since immediately after the Transaction Date December 19, 2013 from the issue or sale of Equity Interests of the Company Issuer and the Guarantors or any of its direct or indirect parent companies or cash contributed contributions to the capital of the Company Issuer and the Guarantors including through consolidation, amalgamation or merger (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company Issuer or any of its SubsidiariesRestricted Subsidiary) as determined in accordance with clauses (3)(BSections 4.07(a)(3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b4.07(a) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses clause (1), (2) and or (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Sources: Indenture (Michaels Companies, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued Applicable Measurement Period would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof foregoing limitations shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with time not to exceed the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (i) $5,250.0 million, plus 200.0 million and (ii) €750.0 million, plus (iii) in 40.0% of Consolidated EBITDA of the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, Issuer for the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingApplicable Measurement Period;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Guarantee thereof) (other than any Additional Notes, if any, or guarantees with respect thereto), including any Guarantee of the Notes;
(3) Indebtedness incurred pursuant to the Existing Facilities in an aggregate principal amount at any time outstanding not to exceed the maximum amount available under the terms of each Existing Facility as in effect on the Company, Completion Date;
(4) Indebtedness of the Issuer and their the Restricted Subsidiaries in existence on the Issue Date or the Merger Completion Date (other than Indebtedness described in clauses (1), (2) and (23) of this Section 4.09(b10.11(b));
(45) Indebtedness (including Capitalized Lease Obligations and Purchase Money Obligations), Disqualified Stock and Preferred Stock incurred by the Company Issuer or any of its the Restricted Subsidiaries, Subsidiaries to finance the purchase, lease lease, expansion, construction, development, replacement, maintenance, upgrade, installation, replacement, repair or improvement of property (real or personal) ), equipment or equipment that is used any other asset (including, but not limited to, MSRs, Servicing Advances, mortgages or useful other loans, mortgage-related securities or derivatives, consumer receivables, REO Assets, Residual Interests, mortgage-related receivables or other similar assets (or any interests in a Similar Businessany of the foregoing)), whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstandingassets; so long as provided that the Liens securing such Indebtedness exists may not extend to any other property owned by the Issuer or any of its Restricted Subsidiaries at the date time the Lien is incurred and the Indebtedness secured by the Lien may not be incurred more than 270 days after the latter of the acquisition or completion of the construction of the property subject to the Lien, provided, further that the amount of such purchaseIndebtedness does not exceed the fair market value of the assets developed, lease constructed, purchased, leased, repaired, maintained, expanded, replaced, upgraded, installed or improvement or is created within 270 days thereafterimproved with the proceeds of such Indebtedness;
(5a) Indebtedness incurred by the Company Issuer or any of its the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of businessbusiness or consistent with past practice, including letters of credit in favor of suppliers or trade creditors or in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance and (b) Indebtedness of the Issuer or any of its Restricted Subsidiaries as an account party in respect of letters of credit, bank guarantees or similar instruments in favor of suppliers, customers or other creditors issued in the ordinary course of business or consistent with past practice; provided, provided that upon the drawing aggregate principal amount of such letters Indebtedness under this clause (6)(b), when aggregated with the outstanding amount of credit or Indebtedness under clause (17) of this Section 10.11(b) incurred to refinance Indebtedness initially incurred in reliance on this clause (6)(b), shall not exceed at any one time outstanding the incurrence greater of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence(x) $50.0 million and (y) 10.0% of Consolidated EBITDA of the Issuer for the Applicable Measurement Period at any one time outstanding;
(67) Permitted Funding Indebtedness;
(8) Permitted Securitization Indebtedness and Indebtedness under Credit Enhancement Agreements;
(9) Non-Recourse Indebtedness;
(10) Indebtedness arising from agreements of the Company Issuer or its any of the Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts earn-out or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets assets, a Subsidiary or a Subsidiaryan Investment, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(711) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor Guarantor, excluding any Indebtedness in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business or consistent with past practice (other than and not in connection with the Issuer) borrowing of money), is expressly subordinated in right of payment (to the extent permitted by applicable law and it does not result in material adverse tax consequences) to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause;
(12) Indebtedness of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor, excluding any Indebtedness in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business or consistent with past practice (and not in connection with the borrowing of money), such Indebtedness is expressly subordinated in right of payment (to the extent permitted by applicable law and it does not result in material adverse tax consequences) to the Notes or the Guarantee of the Notes of such Guarantor; provided, further, that any subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause;
(13) shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such Preferred Stock or Disqualified Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock or Disqualified Stock (except to the Company Issuer or another Restricted Subsidiary or any pledge of its Restricted Subsidiariessuch Capital Stock constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed in each case to be an issuance of such shares of Preferred Stock or Disqualified Stock, as applicable (to the extent such Preferred Stock or Disqualified Stock is then outstanding), not permitted by this clause;
(1014) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk);
(1115) obligations in respect of self-insurance and obligations in respect of stays, customs, performance, indemnity, bid, appeal appeal, judgment, surety and surety other similar bonds or instruments and performance, bankers’ acceptance facilities and completion guarantees and similar obligations provided by the Company Issuer or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of businessbusiness or consistent with past practice or in connection with judgments that do not result in an Event of Default;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any of its Restricted Subsidiary equal Subsidiaries in an aggregate principal amount or liquidation preference up to 200.0% of the net cash proceeds received by the Company Issuer since immediately after the Transaction Completion Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies Issuer or cash contributed to the capital of the Company Issuer (in each case, other than Excluded Contributions or proceeds of Disqualified Stock or sales of Equity Interests to the Company Issuer or any of its Subsidiaries) as determined in accordance with clauses (3)(B3)(b) and (3)(C3)(c) of Section 4.07(a10.10(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b10.10(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1), (2) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, Issuer or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued pursuant to this clause (12)(b16)(b) and any outstanding amount of Indebtedness under clause (17) of this Section 10.11(b) incurred to refinance Indebtedness initially incurred in reliance on this clause (16)(b), does not at any one time outstanding exceed the greater of (x) $900.0 250.0 million and (y) 50.0% of Consolidated EBITDA of the Issuer for the Applicable Measurement Period (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b16)(b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b16)(b) but shall be deemed incurred for the purposes of pursuant to Section 4.09(a10.11(a) hereof from and after the first date on which the Company Issuer or such Restricted Subsidiary could have incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b10.11(a));
(1317) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or the issuance by the Issuer or any Restricted Subsidiary, Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which that serves to refund refund, refinance, replace, renew, extend, defease, repay, prepay, redeem or refinance retire (collectively, “refinance” with “refinances,” “refinanced” and “refinancing” having a correlative meaning) any Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any of its Restricted Subsidiaries incurred or issued as permitted under Section 4.09(a10.11(a) hereof and clauses (2), (34), (45), (6)(b) and (12)(a) of this Section 4.09(b16), this clause (1317) and clause clauses (1418), (22), (23), (27), (28) and (38) of this Section 4.09(b10.11(b) or any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay accrued but unpaid interest, dividends, premiums (including reasonable tender premiums), defeasance costs, underwriting discounts, fees, costs and expenses (including original issue discount, upfront fees or similar fees) in connection therewith with such refinancing (the “Refinancing Indebtedness”) on or prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded refinanced (or refinancedrequires no or nominal payments in cash (other than interest payments) prior to the date that is 91 days after the maturity date of the applicable series of Notes),
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu in right of payment to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu in right of payment to the Notes or the such Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,, and
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) include Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of the Company Issuer or the Issuera Guarantor; provided, further, that subclause (A) of this clause (17) shall not apply to any refinancing of any Secured Indebtedness;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(1418) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, Issuer or a Restricted Subsidiary incurred or issued to finance an acquisition or Investment or (y) Persons that are acquired by the Company Issuer or any a Restricted Subsidiary or merged into, amalgamated with or amalgamated into consolidated with the Company Issuer or a Restricted Subsidiary in accordance with the terms of this IndentureIndenture (including designating an Unrestricted Subsidiary as a Restricted Subsidiary); provided that after giving pro forma effect to such Investment, acquisition, merger merger, amalgamation or amalgamation consolidation, either:
(A) the Company Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, 10.11(a); or
(B) the Fixed Charge Coverage Ratio of the Company Issuer and the its Restricted Subsidiaries is equal to or greater than immediately prior to such Investment, acquisition, merger merger, amalgamation or amalgamation;consolidation, provided, however, that on a pro forma basis, no more than the greater of (i) $100.0 million and (ii) 20.0% of Consolidated EBITDA of the Issuer for the Applicable Measurement Period of Indebtedness, Disqualified Stock or Preferred Stock at any one time outstanding and incurred by Restricted Subsidiaries that are not Guarantors pursuant to clause (x) shall be incurred and outstanding.
(15a) Cash Management Obligations, (b) Indebtedness in respect of netting services, overdraft protections and similar arrangements and other Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
or (16c) Indebtedness owed on a short-term basis of no longer than 30 days to banks and other financial institutions incurred in the Company ordinary course of business or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orconsistent with past p
Appears in 1 contract
Sources: Indenture (Wmih Corp.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company Issuer will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or any Restricted Subsidiary that is not a Guarantor to issue Preferred Stock; provided, however, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or and issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), and issue shares of Disqualified Stock and issue shares of or Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis of the Issuer for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued Applicable Measurement Period would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of the Applicable Measurement Period; provided, further, that Restricted Subsidiaries that are not Guarantors may incur Indebtedness or issue Disqualified Stock or Preferred Stock if, after giving pro forma effect to such four-quarter periodincurrence or issuance (including a pro forma application of the net proceeds therefrom), no more than an aggregate of the greater of (x) $75.0 million and (y) 6.0% of Total Assets of the Issuer as of the end of the Applicable Measurement Period of Indebtedness or Disqualified Stock or Preferred Stock of Restricted Subsidiaries that are not Guarantors incurred pursuant to this paragraph, together with amounts incurred under clause (14)(x) of Section 10.11(b) by Restricted Subsidiaries that are not Guarantors, would be outstanding at such time.
(b) The provisions of Section 4.09(a) hereof foregoing limitations shall not apply to:
(1) the incurrence of Indebtedness under the Credit Facilities by the Company, the Issuer or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount then outstanding at any one timenot to exceed the sum of (a) $1,950.0 million plus (b) an additional amount if, when taken together with after giving pro forma effect to the aggregate principal incurrence of such additional amount (or, if issued with original issue discountand the application of the proceeds therefrom, the accreted value) Consolidated Secured Debt Ratio of Existing Secured Notes, the NXP Notes and Notes then outstanding, Issuer for the Applicable Measurement Period would be no greater than 4.5 to 1.00; provided that for purposes of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in determining the case of any refinancing of any Indebtedness permitted amount that may be incurred under this clause (1)(b), all Indebtedness incurred under this clause (1)(b) shall be deemed to be included in clause (1) or any portion thereof, of the aggregate amount definition of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing“Consolidated Secured Debt Ratio”;
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Note Guarantee thereof) (other than any Additional Notes, if any, or Note Guarantees with respect thereto), including any Guarantee of the Notes;
(3) Indebtedness of the Company, the Issuer and their its Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b10.11(b));
(4) Indebtedness (including Capitalized Lease Obligations and Purchase Money Obligations), Disqualified Stock and Preferred Stock incurred by the Company Issuer or any of its Restricted Subsidiaries, to finance the purchase, lease lease, expansion, construction, development, replacement, maintenance, upgrade, installation, replacement, repair or improvement of property (real or personal) ), equipment or equipment that is used or useful in a Similar Business, whether any other asset (including through the direct purchase of assets or the Capital Stock of any Person owning such assets in an property, equipment or other assets); provided that the aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other amount of Indebtedness, Disqualified Stock and/or and Preferred Stock incurred or issued and outstanding under pursuant to this clause (4), when aggregated with all outstanding Indebtedness under clause (13) of this Section 10.11(b) incurred to refinance Indebtedness initially incurred in reliance on this clause (4), does not to at the time of such incurrence exceed 4.0the greater of (x) $125.0 million and (y) 10.0% of Total Assets at any time outstanding; so long of the Issuer as such Indebtedness exists at of the date end of such purchase, lease or improvement or is created within 270 days thereafterthe Applicable Measurement Period;
(5) (i) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of businessbusiness or consistent with past practice, including letters of credit in favor of suppliers or trade creditors or in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance and (ii) Indebtedness of the drawing Issuer or any of such its Restricted Subsidiaries as an account party in respect of letters of credit credit, bank guarantees or similar instruments or other guarantee obligations in favor of suppliers, customers, franchisees, lessors, licensees, sublicensees, distribution partners or other creditors issued in the incurrence ordinary course of such Indebtedness, such obligations are reimbursed within 30 days following such drawing business or incurrenceconsistent with past practice;
(6) Indebtedness arising from agreements of the Company Issuer or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts earn-out or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a SubsidiarySubsidiary or Investment, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor Guarantor, excluding any Indebtedness in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business or consistent with past practice (other than and not in connection with the Issuer) borrowing of money), is expressly subordinated in right of payment (but only to the extent permitted by applicable law and to the extent such subordination does not result in material adverse tax consequences) to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause;
(8) Indebtedness of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor, excluding any Indebtedness in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business or consistent with past practice (and not in connection with the borrowing of money), such Indebtedness is expressly subordinated in right of payment (but only to the extent permitted by applicable law and to the extent such subordination does not result in material adverse tax consequences) to the Note Guarantee of such Guarantor; provided, further, that any subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause;
(9) shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such Preferred Stock or Disqualified Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock or Disqualified Stock (except to the Company Issuer or another Restricted Subsidiary or any pledge of its Restricted Subsidiariessuch Capital Stock constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed in each case to be an issuance of such shares of Preferred Stock or Disqualified Stock, as applicable (to the extent such Preferred Stock or Disqualified Stock is then outstanding), not permitted by this clause;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk);
(11) obligations in respect of self-insurance and obligations in respect of stays, customs, performance, indemnity, bid, appeal and appeal, judgment, surety bonds and other similar bonds or instruments and performance, bankers’ acceptance facilities and completion guarantees and similar obligations provided by the Company Issuer or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of businessbusiness or consistent with past practice;
(12i) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any of its Restricted Subsidiary equal Subsidiaries in an aggregate principal amount or liquidation preference of up to 200.0100.0% of the net cash proceeds received by the Company Issuer since immediately after the Transaction Issue Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies Issuer or cash contributed to the capital of the Company Issuer (in each case, other than Excluded Contributions or proceeds of Disqualified Stock or sales of Equity Interests to the Company Issuer or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a10.10(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b10.10(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1), (2) and (3) of the definition thereof) and (bii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, Issuer or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other outstanding Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued pursuant to this clause (12)(b12)(ii) and all outstanding Indebtedness under clause (13) of this Section 10.11(b) incurred to refinance Indebtedness initially incurred in reliance on this clause (12)(ii), does not exceed, at any one the time outstanding exceed of such incurrence or issuance, the greater of (x) $900.0 100.0 million and (y) 7.5% of Total Assets of the Issuer as of the end of the Applicable Measurement Period (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b12)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b12)(ii) but shall be deemed incurred for the purposes of pursuant to Section 4.09(a10.11(a) hereof from and after the first date on which the Company Issuer or such Restricted Subsidiary could have incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a10.11(a) hereof without reliance on this clause (12)(b12)(ii));
(13) the incurrence or issuance by the Company Issuer or any of its Restricted Subsidiary, Subsidiaries of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund refund, refinance, replace, renew, extend or refinance defease (collectively, “refinance” with “refinances,” “refinanced” and “refinancing” having a correlative meaning) any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued as permitted under Section 4.09(a10.11(a) hereof and clauses (2), (3), (4) and (12)(a12) above of this Section 4.09(b10.11(b), this clause (13) and clause clauses (14), (19) and (28) below of this Section 4.09(b10.11(b) or any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay accrued but unpaid interest, dividends, premiums (including reasonable tender premiums), defeasance costs, underwriting discounts, fees, costs and fees expenses (including upfront fees, original issue discount or similar fees) in connection therewith with such refinancing (the “Refinancing Indebtedness”) on or prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded refinanced (or refinancedrequires no or nominal payments in cash (other than interest payments) prior to the date that is 91 days after the maturity date of the Notes),
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu in right of payment to the Notes or any Note Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu in right of payment to the Notes or the such Note Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(DC) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the IssuerGuarantor; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; provided further that subclause (A) of this clause (13) shall not apply to any refinancing of any Secured Indebtedness;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, Issuer or a Restricted Subsidiary incurred or issued to finance an acquisition or Investment or (y) Persons that are acquired by the Company Issuer or any a Restricted Subsidiary or merged into, amalgamated with or amalgamated into consolidated with the Company Issuer or a Restricted Subsidiary in accordance with the terms of this IndentureIndenture (including designating an Unrestricted Subsidiary as a Restricted Subsidiary); provided that that, after giving pro forma effect to such Investment, acquisition, merger merger, amalgamation or amalgamation consolidation, either:
(A) the Company Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof10.11(a), or
or (B) the Fixed Charge Coverage Ratio of the Company and Issuer for the Restricted Subsidiaries Applicable Measurement Period is equal to or greater than immediately prior to such Investment, acquisition, merger merger, amalgamation or amalgamation;
(15) Indebtedness arising from consolidation; provided, however, that on a pro forma basis, the honoring Indebtedness, Disqualified Stock or Preferred Stock incurred or issued by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter that are not Guarantors pursuant to clause (14)(x) of credit issued this Section 10.11(b), together with amounts incurred and outstanding pursuant to the Credit Facilities, in a principal amount second proviso to Section 10.11(a) by Restricted Subsidiaries that are not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary Guarantors and all outstanding amounts of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms clause (13) of this Indenture, orSection 10.11(b) incurred to refinance Indebtedness in
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectivelyan incidence thereof, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company Issuer will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis of the Issuer for the Company and its Restricted Subsidiaries’ Issuer’s most recently ended four fiscal quarters for which internal financial statements are available immediately Test Period preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued (or, in the case of Indebtedness under Designated Revolving Commitments, on the date such Designated Revolving Commitments are established after giving pro forma effect to the incurrence of the entire committed amount of Indebtedness thereunder, in which case such committed amount under such Designated Revolving Commitments may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this proviso) would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such fourTest Period; provided, further, Restricted Subsidiaries of the Issuer that are not Guarantors may not incur Indebtedness or issue Disqualified Stock or Preferred Stock under this paragraph if, after giving pro forma effect to such incurrence (including a pro forma application of the net proceeds therefrom), the aggregate amount of Indebtedness and Disqualified Stock and Preferred Stock of Restricted Subsidiaries that are not Guarantors incurred or issued pursuant to this paragraph then outstanding would exceed the greater of (x) $150.0 million and (y) 30.0% of Run-quarter periodRate Adjusted EBITDA of the Issuer for the most recently ended Test Period on the date of such incurrence or issuance.
(b) The provisions of Section 4.09(a) hereof shall will not apply to:
(1i) the incurrence of Indebtedness under pursuant to Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of drawn letters of credit and bankers’ acceptances thereunder (with drawn letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness ) in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with time outstanding not to exceed the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, sum of (iA) $5,250.0 million1,650.0 million and (B) the Permitted Incremental Amount; provided, that any Indebtedness incurred under this Section 4.09(b)(i) may be refinanced with additional Indebtedness in an amount equal to the principal of the Indebtedness so refinanced, plus any additional amount to pay premiums (ii) €750.0 millionincluding tender premiums), plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereofaccrued and unpaid interest, the aggregate amount of feesexpenses, underwriting discounts, premiums and other defeasance costs and expenses Incurred fees in connection with such refinancingtherewith;
(2ii) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes and the Guarantees (not including but excluding any Additional Notes), including any Guarantee of the Notes;
(3iii) the incurrence of (a) Indebtedness of the Company, by the Issuer and their Subsidiaries any Restricted Subsidiary in existence on the Issue Date or the Merger Date (other than excluding Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b)), (b) including Indebtedness in respect of Existing Mortgage Debt and (c) the Existing Notes;
(4iv) (A) the incurrence of Attributable Indebtedness, (B) Indebtedness (including Capitalized Lease Obligations and Purchase Money Obligations), ) and Disqualified Stock incurred or issued by the Issuer or any Restricted Subsidiary and Preferred Stock incurred issued by the Company or any of its Restricted Subsidiaries, Subsidiary to finance (x) the construction of the Life Time Living facility in Henderson, Nevada and (y) the purchase, lease lease, expansion, construction, installation, replacement, repair or improvement of property (real or personal) ), equipment or equipment other assets, including assets that is are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, other than with respect to Capitalized Lease Obligations in connection with any Sale and Lease-Back Transaction (which shall be permitted Indebtedness), together with any Refinancing Indebtedness in respect thereof (excluding any Incremental Amounts) and all other Indebtedness, Disqualified Stock and/or Preferred Stock incurred or issued and outstanding under this clause (4)iv)(B)(y) at such time, not to exceed 4.0the greater of (1) $150.0 million and (2) 30.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at Run-Rate Adjusted EBITDA of the Issuer for the most recently ended Test Period on the date of such purchaseincurrence and (C) any Refinancing Indebtedness thereof (it being understood that any Indebtedness, lease Disqualified Stock or improvement Preferred Stock incurred or is created within 270 days thereafterissued pursuant to this clause (iv) will cease to be deemed incurred, issued or outstanding for purposes of this clause (iv) but will be deemed incurred or issued for the purposes of Section 4.09(a), clause (2), (3) or (4) of the Permitted Incremental Amount under clause (i)(B) or clause (xxxi) of this Section 4.09(b) from and after the first date on which the Issuer or such Restricted Subsidiary could have incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under clause (2), (3) or (4) of the Permitted Incremental Amount under clause (i)(B) or clause (xxxi) of this Section 4.09(b) or Section 4.09(a) without reliance on this clause (iv));
(5v) (A) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries Subsidiary constituting reimbursement obligations with respect to letters of credit credit, bank guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of businessbusiness or consistent with industry practice, including letters of credit in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, unemployment insurance or other social security legislation or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance and (B) the incurrence of such IndebtednessIndebtedness by the Issuer or any Restricted Subsidiary as an account party in respect of letters of credit, such obligations are reimbursed within 30 days following such drawing bank guarantees or incurrencesimilar instruments in favor of suppliers, trade creditors or other Persons incurred in the ordinary course of business or consistent with industry practice;
(6vi) the incurrence of Indebtedness arising from agreements of the Company Issuer or its any Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition;
(vii) the incurrence of Indebtedness or the issuance of Disqualified Stock of the Issuer to a Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Issuer or any Restricted Subsidiary); provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness for borrowed money owing or shares of Disqualified Stock issued to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the NotesNotes to the extent permitted by applicable law and it does not result in adverse tax consequences; provided further that provided, further, any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness or shares of Disqualified Stock (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall will be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness (to the extent such Indebtedness is then outstanding) or issuance of Disqualified Stock, as applicable, not permitted by this clause (vii);
(8) viii) the incurrence of Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Issuer or any Restricted Subsidiary); provided that if provided, any such Indebtedness for borrowed money incurred by a Guarantor incurs such Indebtedness and owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except Guarantor to the Company or another Restricted Subsidiary) shall be deemedextent permitted by applicable law and it does not result in adverse tax consequences; provided, in each casefurther, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any such subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien) will be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause (viii);
(ix) the issuance of Shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided, any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary that holds such Preferred Stock or Disqualified Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock or Disqualified Stock (except to the Company Issuer or another Restricted Subsidiary or any pledge of its Restricted Subsidiariessuch Indebtedness constituting a Permitted Lien) shall will be deemed deemed, in each case case, to be an issuance of such shares of Preferred StockStock or Disqualified Stock (to the extent such Preferred Stock is then outstanding) not permitted by this clause (ix);
(10x) the incurrence of Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk);
(11xi) obligations the incurrence of Obligations in respect of self-insurance and Obligations in respect of performance, bid, appeal and surety bonds and performance, banker’s acceptance facilities and completion guarantees guarantees, indemnifications and similar obligations provided by the Company Issuer or any Restricted Subsidiary or Obligations in respect of its Restricted Subsidiaries letters of credit, bank guarantees, non-recourse carve-outs or similar instruments related thereto, in each case in the ordinary course of businessbusiness or consistent with industry practice, including those incurred to secure health, safety and environmental obligations;
(12A) (a) the incurrence of Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal in an aggregate principal amount or liquidation preference at any one time outstanding of up to (1) 200.0% of the net cash proceeds received by the Company Issuer and its Restricted Subsidiaries since immediately after the Transaction Date June 10, 2015 from the issue or sale of Equity Interests of the Company Issuer and the Guarantors or any of its direct or indirect parent companies or cash contributed contributions to the capital of the Company Issuer and the Guarantors including through consolidation, amalgamation or merger (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company Issuer or any of its SubsidiariesSubsidiary) as determined in accordance with clauses (3)(Biv)(C)(2) and (3)(Civ)(C)3) of Section 4.07(a) hereof and (2) 100.0% of the principal amount of Indebtedness of the Issuer and its Subsidiaries that is converted into Equity Interests (other than Disqualified Stock or sales of Equity Interests to the Issuer or any Subsidiary or any Equity Interests that are preferred shares that bear a cash-pay dividend), to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b4.07(a); and
(B) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) the incurrence of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencepreference that, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued, as applicable, pursuant to this clause (12)(bxii)(B), does not at not, together with any one time outstanding Refinancing Indebtedness in respect thereof (excluding any Incremental Amounts), exceed the greater of (x) $900.0 300.0 million and (y) 50.0% of Run-Rate Adjusted EBITDA of the Issuer for the most recently ended Test Period on the date of such incurrence (and any Refinancing Indebtedness thereof); plus, in the event of any extension, replacement, refinancing, renewal or defeasance of any such Indebtedness or Disqualified Stock, an amount equal to the amount of any premium required to be paid under the terms of the instrument governing such Indebtedness, Disqualified Stock or Preferred Stock and any defeasance costs and any fees and expenses (including original issue discount, upfront fees or similar fees) incurred in connection with the issuance of such new Indebtedness or the extension, replacement, refunding, refinancing, renewal or defeasance of such Indebtedness or Disqualified Stock; it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued pursuant to this clause (12xii) (b) shall will cease to be deemed incurred incurred, issued or outstanding for purposes of this clause (12)(bxii) but shall will be deemed incurred or issued for the purposes of Section 4.09(a), clause (2), (3) hereof or (4) of the Permitted Incremental Amount under clause (i)(B) or clause (xxxi) of this Section 4.09(b) from and after the first date on which the Company Issuer or such Restricted Subsidiary could have incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under clause (2), (3) or (4) of the Permitted Incremental Amount under clause (i)(B) or clause (xxxi) of this Section 4.09 (a4.09(b) hereof or Section 4.09(a) without reliance on this clause (12)(b)xii);
(13xiii) the incurrence by the Company Issuer of Indebtedness or any Disqualified Stock or the incurrence by a Restricted Subsidiary, Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which that serves to refund refund, refinance, extend, replace, renew or refinance defease (collectively, “refinance” with “refinances,” “refinanced,” and “refinancing” having a correlative meaning) any Indebtedness, Indebtedness (including any Designated Revolving Commitments) incurred or Disqualified Stock or Preferred Stock incurred issued as permitted under Section 4.09(a) hereof and clauses (2ii), (3iii), (4iv) and (12)(a) of xii)(A)of this Section 4.09(b), this clause (13xiii) and clause clauses (14xiv), (xxiii) and (xxxi) of this Section 4.09(b) or any successive Refinancing Indebtedness with respect to any of the foregoing;
(xiv) the incurrence of:
(A) Indebtedness or Disqualified Stock of the Issuer or Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary incurred or issued to so refund finance an acquisition or refinance such Indebtedness, Disqualified Stock Investment (or Preferred Stock including additional Indebtedness, Disqualified Stock other purchase of assets) or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees that is assumed by the Issuer or any Restricted Subsidiary in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturitywith such acquisition or Investment; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,and
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Issuer or any Restricted Subsidiary or merged into, amalgamated or amalgamated into consolidated with the Company Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that provided, in the case of (A) and (B), either:
(1) after giving pro forma effect to such acquisition, merger amalgamation, consolidation or amalgamation either
merger, either (AI) the Company Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, ort
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, and subject to the second proviso in this Section 4.09(c) hereof4.09(a), any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided further, that Restricted Subsidiaries that are not Guarantors may not incur Indebtedness or issue Disqualified Stock or Preferred Stock pursuant to this Section 4.09(a) if, after giving pro forma effect to such incurrence or issuance (including a pro forma application of the net proceeds therefrom), the aggregate amount of Indebtedness, Disqualified Stock and Preferred Stock of Restricted Subsidiaries that are not Guarantors incurred or issued pursuant to this Section 4.09(a) would exceed $25.0 million.
(b) The provisions of Section 4.09(a) hereof shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer Company or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with time outstanding not to exceed the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (ix) $5,250.0 million, plus 175.0 million and (iiy) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingBorrowing Base;
(2) the incurrence by the Issuer Company and any Guarantor of (a) Indebtedness represented by the Series A-1 Notes (not including any Guarantee) (other than any Additional Notes) and any notes (including Guarantees thereof) issued in exchange for the Series A-1 Notes pursuant to the Registration Rights Agreement or similar agreement and (b) Indebtedness under the Term Loan Facility and/or Series A-2 Notes (including Guarantees thereof) (other than any Additional Notes) and any notes (including Guarantees thereof) issued in exchange for the Series A-2 Notes pursuant to a registration rights agreement, up to an aggregate principal amount of $310.0 million (plus up to an additional $15.0 million of Series A-2 Notes), including any Guarantee of the Notes;
(3) Indebtedness of the Company, the Issuer Company and their its Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), ) and Disqualified Stock and Preferred Stock incurred or issued by the Company or any of its Restricted Subsidiaries, and Preferred Stock issued by any of the Company’s Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment (other than software) that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets, in an aggregate principal amount, together with any amount at the date of such incurrence (including all Refinancing Indebtedness in respect thereof and all incurred to refinance any other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under Indebtedness incurred pursuant to this clause (4Section 4.09(b)(4), ) not to exceed 4.0% of Total Assets at any time outstandingAssets; so long as provided, however, that such Indebtedness exists at the date of such purchase, lease purchase or improvement transaction or is created within 270 days thereafterthereafter (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (4) shall cease to be deemed incurred or outstanding for purposes of this Section 4.09(b)(4) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09(a) hereof without reliance on this Section 4.09(b)(4));
(5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that
(A) such Indebtedness is not reflected on the balance sheet of the Company Company, or any of its Restricted Subsidiaries (contingent obligations Contingent Obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause subclause (6) (aA)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any the Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of the applicable series of such Guarantor; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Indebtedness being held by a person other than the Company or a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; , provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed in each case to be an issuance of such shares of Preferred StockStock not permitted by this clause (9);
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness of the Company or any Restricted Subsidiary permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0100.0% of the net cash proceeds received by the Company since immediately after the Transaction Issue Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B3)(b) and (3)(C3)(c) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1), (2) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(bSection 4.09(b)(12)(b), does not at any one time outstanding exceed the greater of (x) $900.0 150.0 million and (y) 5.0% of Total Assets (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (bSection 4.09(b)(12)(b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(bSection 4.09(b)(12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a4.09(a) hereof without reliance on this clause (12)(bSection 4.09(b)(12)(b));
(13) the incurrence or issuance by the Company or any Restricted SubsidiarySubsidiary of Indebtedness or Disqualified Stock, and the issuance by any Restricted Subsidiary of IndebtednessPreferred Stock, Disqualified Stock or Preferred Stock in each case which serves to refund refund, refinance, replace, renew, extend or refinance defease any Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund refund, refinance, replace, renew, extend or refinance defease such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded refunded, refinanced, replaced, renewed, extended or refinanceddefeased,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes of the applicable series or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes of the applicable series or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,, and
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
include (i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of the Company or the Issuer;
Company, (ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor Guarantor, or the Issuer; or
(iii) Indebtedness or Disqualified Stock of the Company or Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; provided further that subclause (A) of this clause (13) will not apply to any refunding or refinancing of any Secured Indebtedness;
(14) (x) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary, incurred or issued to finance an acquisition or (y) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that in the case of (x) and (y) after giving effect to such acquisitionacquisition or merger, merger or amalgamation either
either (Aa) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, or
or (Bb) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger acquisition or amalgamationmerger;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five two Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Sources: Indenture (Ahny-Iv LLC)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall not, and shall not permit any of its the Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that (x) the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary (other than MultiPlan and its Restricted Subsidiaries) may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its the Restricted Subsidiaries’ most recently ended four fiscal quarters Subsidiaries for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued Applicable Measurement Period would have been at least 2.00 to 1.00 and (y) MultiPlan may incur Indebtedness (including Acquired Indebtedness) and issue shares of Disqualified Stock, and any of the “Restricted Subsidiaries of MultiPlan may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Test”)Ratio on a consolidated basis for MultiPlan and its Restricted Subsidiaries for the Applicable Measurement Period would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter periodperiod(for purposes of determining Consolidated EBITDA) and at the end (for purposes of determining Consolidated Total Indebtedness) of the Applicable Measurement Period.
(b) The provisions of Section 4.09(a) hereof shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer Company or any other of the Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount time of incurrence not to exceed the sum of (or, if issued with original issue discount, a) the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (i) $5,250.0 million, plus 3,900,000,000 and (ii) €750.0 millionthe maximum principal amount of Secured Indebtedness that could be incurred after giving pro forma effect to the incurrence of such Secured Indebtedness (provided, plus (iii) in however, for the case avoidance of any refinancing of doubt, that the pro forma calculation shall not give effect to any Indebtedness permitted that may be incurred on such determination date pursuant to the following clause (b)) such that after giving effect to such incurrence, the Consolidated Secured Debt Ratio of the Company for the Applicable Measurement Period would be no greater than 5.00 to 1.00 and (b) the greater of (i) $325,000,000 and (ii) 50.0% of Consolidated EBITDA of the Company for the Applicable Measurement Period, provided that in no event shall such amount derived under this clause (1ii) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingexceed $655,000,000;
(2) the incurrence by the Issuer Company and any Guarantor Guarantors of Indebtedness represented by the Notes (not including any Guarantee) (other than any Additional Notes), ) or any PIK Notes issued from time to time in respect of any PIK Payment in accordance with the terms hereof (including any Guarantee of the Notesthereof);
(3) Indebtedness of the Company, Company and the Issuer and their Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1Section 4.09(b)(1) and (2) of this Section 4.09(b), but including the MultiPlan Notes);
(4) Indebtedness (including Capitalized Financing Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Company or any of its the Restricted Subsidiaries, to finance the purchase, lease development, lease, construction, repair, expansion, installation, repair, maintenance, upgrade or improvement of property (real or personal) ), equipment or equipment that is used or useful in a Similar Businessother assets, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an assets; provided that the aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other amount of Indebtedness, Disqualified Stock and/or and Preferred Stock issued incurred and outstanding under pursuant to this clause (4), when aggregated with the outstanding amount of Indebtedness under Section 4.09(b)(13) incurred to refinance Indebtedness initially incurred in reliance on this clause (4), does not to exceed 4.0at the time of incurrence the greater of (a) $175,000,000 and (b) 25.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at Consolidated EBITDA of the date of such purchase, lease or improvement or is created within 270 days thereafterCompany for the Applicable Measurement Period;
(5) Indebtedness incurred by the Company or any of its the Restricted Subsidiaries constituting reimbursement obligations with respect to bankers’ acceptances, bank guarantees, letters of credit credit, warehouse receipts or similar facilities issued or entered into in the ordinary course of businessbusiness or consistent with past practice, including letters of credit in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit performance or the incurrence of such Indebtednesssurety bonds, such obligations are reimbursed within 30 days following such drawing health, disability or incurrenceother employee benefits or property, casualty or liability insurance or self-insurance;
(6) Indebtedness arising from agreements of the Company or its the Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts earn-outs or similar obligations, in each case, incurred or assumed in connection with the Transactions, Investments permitted under this Indenture, and the disposition or acquisition of any business, assets or a SubsidiaryCapital Stock, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary Capital Stock for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected but including in connection with guarantees of Indebtedness, letters of credit and surety bonds on performance bonds securing the balance sheet performance of the Company or any of its the Restricted Subsidiaries (contingent obligations referred pursuant to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such dispositionagreements;
(7) Indebtedness of the Company owing to a Restricted Subsidiary; provided that any if such Indebtedness is owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any and if such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business or consistent with past practice (other than and not in connection with the Issuerborrowing of money), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedextent permitted by applicable law and it does not result in material adverse tax consequences); provided, in each casefurther, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor and if such Indebtedness is not in respect of accounts payable incurred in connection with goods sold or services rendered in the ordinary course of business or consistent with past practice (and not in connection with the borrowing of money), such Indebtedness shall be expressly subordinated in right of payment (to the extent permitted by applicable law and it does not result in material adverse tax consequences) to the Guarantee of the Notes of such Guarantor; provided, further, that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause (8);
(9) shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer (other than the incurrence of a Permitted Lien) of any such shares of Preferred Stock or Disqualified Stock (except to the Company or another of its the Restricted SubsidiariesSubsidiaries or any pledge of such Capital Stock constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed in each case to be an issuance of such shares of Preferred Stock or Disqualified Stock, as applicable (to the extent such Preferred Stock or Disqualified Stock is then outstanding), not permitted by this clause (9);
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk);
(11) obligations in respect of workers’ compensation claims, self-insurance and obligations in respect of stays, customs, performance, indemnity, bid, appeal appeal, judgment, surety or other similar bonds or instruments and surety bonds performance, bankers’ acceptance facilities and completion guarantees and similar obligations provided by the Company or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case not in connection with the ordinary course borrowing of businessmoney;
(12) (aA) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal in an aggregate principal amount or liquidation preference up to 200.0100.0% of the net cash proceeds received by the Company since immediately after the Transaction Issue Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than Excluded Contributions or proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B3)(b) and (3)(C3)(c) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1), (2) and (3) of the definition thereof) and (bB) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b12)(B), does not at any one the time outstanding of incurrence exceed the greater of (i) $900.0 million 230,000,000 and (ii) 35.0% of Consolidated EBITDA of the Company for the Applicable Measurement Period pursuant to this clause (12)(B) (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b12)(B) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b12)(B) but shall be deemed incurred for the purposes of pursuant to Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a4.09(a) hereof without reliance on this clause (12)(b12)(B));
(13) the incurrence by the Company or any Restricted Subsidiary, Subsidiary of IndebtednessIndebtedness or the issuance by the Company or any Restricted Subsidiary of, Disqualified Stock or Preferred Stock which that serves to refund refund, refinance, replace, renew, extend or refinance defease (collectively, “refinance” with “refinances,” “refinanced” and “refinancing” having a correlative meaning) any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued as permitted under Section 4.09(a) hereof and clauses (2Section 4.09(b)(2), (3), (4), (12)(a), (13), (14) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b23) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance refinance, such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay accrued and unpaid interest, dividends, premiums (including reasonable tender premiums), defeasance costs costs, underwriting discounts, and fees and expenses (including original issue discount, upfront fees or similar fees) in connection therewith (the “Refinancing Indebtedness”) on or prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(DC) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the IssuerGuarantor; or
(iiiii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; and provided, further, that subclause (A) of this clause (13) shall not apply to any refinancing of (x) any Secured Indebtedness or (y) any Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that is not a Guarantor;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, or a Restricted Subsidiary incurred or issued to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged into, consolidated with or amalgamated into with the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness is in an aggregate amount not to exceed at the time of incurrence
(A) the greater of (i) $100,000,000 and (ii) 15.0% of Consolidated EBITDA of the Company for the Applicable Measurement Period pursuant to this clause (14); plus
(B) unlimited additional Indebtedness if after giving pro forma effect to such acquisition, merger merger, consolidation or amalgamation either
(Ax) in the case of Indebtedness, Disqualified Stock or Preferred Stock of the Company and any Restricted Subsidiary (other than MultiPlan and its Restricted Subsidiaries), the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to either (i) the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) or (ii) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries (other than MultiPlan and its Restricted Subsidiaries) is equal to or greater than immediately prior to such acquisition, merger, consolidation or amalgamation (y) in the case of Indebtedness, Disqualified Stock or Preferred Stock of MultiPlan and any of its Restricted Subsidiaries, (i) MultiPlan would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, or
or (Bii) the Fixed Charge Coverage Ratio of the Company MultiPlan and the its Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger merger, consolidation or amalgamation;
(15) cash management obligations, cash management services and other Indebtedness arising from the honoring by a bank or other financial institution in respect of a checknetting services, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orautomatic clearing house arrangements
Appears in 1 contract
Sources: Indenture (MultiPlan Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Company shall not permit any of its Restricted Subsidiary Subsidiaries (other than a Guarantor) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of the Company for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $805 million outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus ;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer Issuers and any Guarantor the Guarantors of Indebtedness represented by (i) the Original Securities (not including any Additional Securities) and the Guarantees, as applicable (including the Exchange Securities and guarantees thereof) and (ii) the Senior Notes (not including any Additional additional Senior Notes) and the related guarantees thereof (including exchange Senior Notes and related guarantees thereof), including any Guarantee of the Notes;
(3iii) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b));
(4iv) (a) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company to finance (whether prior to or within 270 days after) the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued and then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed the greater of $75.0 million and 4.0% of Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the Transactions or any other acquisition or disposition of any business, assets or a SubsidiarySubsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing owed to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notesobligations of the Company under the Securities; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence Incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into that are not incurred for speculative purposespurposes and either: (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases or sales;
(11xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amount or liquidation preferenceamount, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed $100.0 million at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Indebtedness Incurred under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which the Company, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii));
(xiii) any guarantee by the Company or a Guarantor of Indebtedness or other obligations of the Company or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by the Company or such Restricted Subsidiary could have incurred is permitted under the terms of this Indenture; provided that if such IndebtednessIndebtedness is by its express terms subordinated in right of payment to the Securities or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of such Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantor’s Guarantee with respect to the Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by of a Restricted Subsidiary of the Company which serves to refund, refinance or defease any Restricted Subsidiary, of Indebtedness, Indebtedness Incurred or Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred issued as permitted under Section 4.09(a4.03(a) hereof and clauses (2ii), (3iii), (4iv), (xiv), (xv), (xix) and (12)(axx) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock Stock, including additional any Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,refinanced and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date one year following the last maturity date of any Securities then outstanding were instead due on such date one year following the last date of maturity of the Securities;
(B2) has a Stated Maturity which is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or (y) 91 days following the last maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (ia) Indebtedness subordinated equal to or pari passu junior to the Notes Securities or any the Guarantee thereofof such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is subordinated equal to or pari passu junior, as applicable, to the Notes Securities or the Guarantee at least to the same extent of such Restricted Subsidiary, as the Indebtedness being refinanced or refunded applicable, or (iib) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,;
(C4) is Incurred in an aggregate amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium, fees and expenses Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is not a Guarantor that refinances Indebtedness of the Company or a Restricted Subsidiary that is a Guarantor, or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(6) in the case of any Refinancing Indebtedness in respect Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of Indebtedness under the Senior Credit Facilitiesthis Section 4.03(b), the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required deemed to have been Incurred and to be incurred substantially contemporaneously with the related refinancing outstanding under such clause (iv) or (xx) of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoingthis Section 4.03(b), as applicable, within 45 days following the incurrence and not this clause (xiv) for purposes of determining amounts outstanding under such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect clauses (iv) or (xix) of the Senior Credit Facilitiesthis Section 4.03(b); provided, such Notesfurther, NXP Notes or Existing Secured Note, or Refinancing Indebtedness that subclauses (1) and (2) of any of the foregoing, as applicable, and
this clause (Dxiv) shall not include:apply to any refunding or refinancing of the Securities or any Senior Indebtedness.
(ixv) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any of its Restricted Subsidiary Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided provided, however, that such Indebtedness, Disqualified Stock or Preferred Stock is not Incurred in contemplation of such acquisition, merger or amalgamation or to provide all or a portion of the funds or credit support required to consummate such acquisition, merger or amalgamation; provided, further, however, that after giving effect to such acquisition, merger or amalgamation acquisition and the Incurrence of such Indebtedness either:
(A1) the Company would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in the first sentence of Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or would be greater than immediately prior to such acquisition, merger or amalgamation;
(15xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five Business Days of its incurrenceIncurrence;
(16xviii) Indebtedness of the Company or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit FacilitiesAgreement, in a principal amount not in excess of the stated amount of such letter of credit;
(17xix) Contribution Indebtedness;
(Axx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) Indebtedness of the Company or any guarantee Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and
(xxii) Indebtedness consisting of customary indemnification, adjustment of purchase price or similar obligations of the Company or any Restricted Subsidiary, in each case Incurred in connection with the acquisition or disposition of any assets by the Company or a any Restricted Subsidiary Subsidiary. For purposes of determining compliance with this Section 4.03, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xxii) above or is entitled to be Incurred pursuant to Section 4.03(a), the Issuers shall, in their sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness in any manner that complies with this Section 4.03; provided that all Indebtedness under the Credit Agreement outstanding on the Issue Date shall be deemed to have been Incurred pursuant to clause (i) of Section 4.03(b) and the Issuers shall not be permitted to reclassify all or other obligations of any Restricted Subsidiary so long as the incurrence portion of such Indebtedness incurred under the Credit Agreement outstanding on the Issue Date. Accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.03. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such Restricted Subsidiary is permitted under guarantee or letter of credit, as the terms case may be, was in compliance with this Section 4.03. For purposes of this Indenturedetermining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, orthe U.S. dollar-equivalent principal amount of Indebtedness d
Appears in 1 contract
Sources: Indenture (Rexnord Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (ai) The Company Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Borrower shall not permit any of its Restricted Subsidiary Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Borrower and any Restricted Subsidiary of the Borrower may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Debt to Adjusted EBITDA Ratio on a consolidated basis of the Borrower for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 be less than or equal to 8.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a10.1(a) hereof shall not apply to:to (collectively, “Permitted Debt”):
(1i) the incurrence Incurrence by the Borrower or its Restricted Subsidiaries of Indebtedness under any Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreements and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $4,000.0 million outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus ;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer and Borrower (and, if applicable, any Guarantor Guarantors) of Indebtedness represented by (a) the Loans and any Guarantees (including any Exchange Notes issued in exchange therefor and guarantees thereof), (b) the Senior Bridge Loans and any guarantees thereof (including any exchange notes issued in exchange therefor and guarantees thereof), and (c) the Notes (and any guarantees thereof, the proceeds of which are used to refinance any Loans or Senior Bridge Loans, but not including any Additional Notes), including any Guarantee Notes in excess of the Notesamount of Loans and Senior Bridge Loans issued on the Closing Date together with all Loans issued as PIK Interest, in each case subject to the second sentence of Section 10.1(c);
(3iii) Indebtedness of the Company, the Issuer Borrower and their its Restricted Subsidiaries in existence existing on the Issue Date or Closing Date, including any Indebtedness Incurred on the Merger Closing Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b10.1(b));
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company Borrower or any of its Restricted Subsidiaries, Disqualified Stock issued by the Borrower or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Borrower to finance (whether prior to or within 270 days after) the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued and then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed 4.0the greater of (x) $450.0 million and (y) 4% of Total Assets at any time outstanding; so long as such Indebtedness exists of the Borrower at the date time of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company Borrower or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company Borrower or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the Transactions or the disposition of any business, assets or a SubsidiarySubsidiary of the Borrower in accordance with the terms of this Agreement, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company Borrower to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee obligations of the Notes of such GuarantorBorrower under the Loans; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Borrower or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Borrower or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to the Borrower or another Restricted Subsidiary; provided, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into other than for speculative purposes): (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Agreement to be incurred pursuant to this Section 4.09, outstanding or (2) for the purpose of fixing or hedging currency exchange rate risk or commodity pricing riskwith respect to any currency exchanges;
(11xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and bonds, completion guarantees and the Lockheed Note provided by the Company Borrower or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company Borrower or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) Borrower and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary of the Borrower not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencewhich, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed the greater of (x) $650.0 million and (y) 4% of Total Assets of the Borrower at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Incurred or issued under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a10.1(a) hereof from and after the first date on which the Company Borrower or such the Restricted Subsidiary Subsidiary, as the case may be, could have incurred Incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a10.1(a) hereof without reliance on upon this clause (12)(bxii));
(13xiii) the incurrence any guarantee by the Company Borrower or a Restricted Subsidiary of Indebtedness or other obligations of the Borrower or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness or other Obligations by the Borrower or such Restricted Subsidiary is permitted under the terms of this Agreement; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Loans or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of Indebtednesssuch guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Loans or such Guarantor’s Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Loans or the Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Borrower which serves to refund refund, refinance or refinance defease any Indebtedness, Indebtedness Incurred or Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a10.1(a) hereof and clauses (2ii), (3iii), (4iv), (xiv), (xv), (xix), (xx), (xxii) and (12)(axxiii) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b10.1(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock Stock, including additional any Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,refinanced and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that was due on or after the date one year following the Extended Maturity Date were instead due on such date one year following the Extended Maturity Date;
(B2) to the extent such Refinancing Indebtedness refinances (ia) Indebtedness subordinated or pari passu junior to the Notes or any Guarantee thereofLoans, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded Loans or (iib) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,;
(C3) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium and fees Incurred in connection with such refinancing;
(4) shall not include Indebtedness of the Borrower or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(5) in the case of any Refinancing Indebtedness in respect Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of Indebtedness under the Senior Credit Facilitiesthis Section 10.1(b), the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required deemed to have been Incurred and to be incurred substantially contemporaneously with the related refinancing outstanding under such clause (iv) or (xx) of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoingthis Section 10.1(b), as applicable, within 45 days following the incurrence and not this clause (xiv) for purposes of determining amounts outstanding under such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect clauses (iv) and (xx) of the Senior Credit Facilitiesthis Section 10.1(b); and provided, such Notesfurther, NXP Notes or Existing Secured Note, or Refinancing Indebtedness that subclause (1) of any of the foregoing, as applicable, and
this clause (Dxiv) shall not include:apply to any refunding, refinancing or defeasance of (A) the Loans or (B) any Secured Indebtedness;
(ixv) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Borrower or any of its Restricted Subsidiary Subsidiaries or merged or amalgamated into the Company Borrower or a Restricted Subsidiary in accordance with the terms of this IndentureAgreement; provided provided, however, that such Indebtedness, Disqualified Stock or Preferred Stock is not Incurred in contemplation of such acquisition, merger or amalgamation; provided, further, however, that after giving effect to such acquisition, merger or amalgamation amalgamation, either:
(A1) the Company Borrower would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Debt to Adjusted EBITDA Ratio test set forth in Section 4.09(a) hereof, 10.1(a); or
(B2) the Fixed Charge Coverage Debt to Adjusted EBITDA Ratio of the Company and the Restricted Subsidiaries is Borrower would be less than or equal to or greater than such ratio immediately prior to such acquisition, merger or amalgamation;
(15xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse (except for Standard Securitization Undertakings) to the Borrower or any Restricted Subsidiary other than a Receivables Subsidiary;
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five Business Days of its incurrenceIncurrence;
(16xviii) Indebtedness of the Company Borrower or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the any Credit FacilitiesAgreement, in a principal amount not in excess of the stated amount of such letter of creditcredit or bank guarantee;
(17xix) Contribution Indebtedness;
(xx) Indebtedness of Restricted Subsidiaries that are not Guarantors; provided, however, that the aggregate principal amount of Indebtedness Incurred under this Section 10.1(b) (Axx), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), does not exceed the greater of (x) $75.0 million and (y) 10% of the Total Assets of the Restricted Subsidiaries of Intelsat Sub Holdco that are not guarantors of any guarantee by Indebtedness of the Company Borrower;
(xxi) Indebtedness of the Borrower or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(xxii) Indebtedness of the Borrower or any of the Restricted Subsidiaries incurred to repurchase or refinance any Specified Existing Intelsat Corp Notes; and
(xxiii) Indebtedness of the Borrower or any of its Restricted Subsidiaries Incurred to repay, repurchase or refinance any of the Existing Subsidiary Notes or the Intelsat ▇▇▇▇▇▇▇ Unsecured Credit Agreement.
(c) For purposes of determining compliance with this Section 10.1, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of one or more of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in Sections 10.1(b)(i) through (xxiii) above or is entitled to be Incurred pursuant to Section 10.1(a), the Borrower shall, in its sole discretion divide, classify or reclassify or later divide, classify or reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock in any manner that complies with this Section 10.1 and such item of Indebtedness, Disqualified Stock or Preferred Stock shall be treated as the incurrence having been Incurred pursuant to one or more of such clauses or pursuant to Section 10.1(a); provided that all Indebtedness incurred by such Restricted Subsidiary is permitted under the terms Credit Agreements outstanding on the Closing Date shall be deemed to have been Incurred pursuant to Section 10.1(b)(i). Upon consummation of the ▇▇▇▇▇▇▇▇ Assignment, all Indebtedness of Intelsat Bermuda and its Restricted Subsidiaries outstanding on the Closing Date (other than Indebtedness described in clauses (i) and (ii) of Section 10.1(b)) shall be deemed to have been Incurred pursuant to Section 10.1(b)(iii). At no time during the period between initial funding of the Loans under this Agreement and the consummation of the ▇▇▇▇▇▇▇▇ Assignment shall the Initial Borrower be deemed to have Incurred the Existing Intelsat Notes. Accrual of interest, the accretion of accreted value, amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be deemed to be an Incurrence of Indebtedness for purposes of this Indenture, orSe
Appears in 1 contract
Sources: Senior Unsecured Pik Election Bridge Loan Credit Agreement (Intelsat LTD)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall Borrower will not, and shall will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) ), with respect to any Indebtedness (including Acquired Indebtedness) ), and the Company Borrower will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, provided that so long as no Event of Default has occurred and is continuing the Company Borrower may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and or issue shares of Preferred Stock, if the Fixed Charge Borrower’s Interest Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ Borrower’s most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued Test Period would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of the proceeds therefrom had occurred at the beginning of such four-quarter periodTest Period; provided, further, that (x) such Indebtedness, Disqualified Stock or Preferred Stock complies with the Required Additional Debt Terms and (y) any incurrence of Indebtedness or issuance of Disqualified Stock or Preferred Stock by any Restricted Subsidiary that is not a Subsidiary Guarantor pursuant to this clause (a) shall be subject to the limitations set forth in Section 6.01(g).
(b) The provisions limitations set forth in clause (a) of this Section 4.09(a) hereof 6.01 shall not apply toto any of the following items:
(1i) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and Receivables Facility; provided that any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of incurred under this subclause (i) $5,250.0 millionshall reduce (for so long as, plus and to the extent that, the Indebtedness referred to in this subclause (iii) €750.0 million, plus (iiiremains outstanding) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, dollar-for-dollar the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingIndebtedness permitted to be incurred under Section 6.01(b)(iii) (y);
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee of the Notes;
(3ii) Indebtedness of the Company, the Issuer Borrower and their Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Company or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in under the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrenceLoan Documents;
(6iii) Indebtedness arising from agreements under the ABL Credit Agreement, when aggregated with the then outstanding amount of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligationsIndebtedness under subclause 6.01(b)(xv) incurred to refinance Indebtedness permitted by this subclause (iii), in each case, incurred or assumed an amount not to exceed the greater of (x) $500.0 million and (y) the Borrowing Base (as defined in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected ABL Credit Agreement as in effect on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (adate hereof)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than 1) the Issuer) is expressly subordinated in right aggregate principal amount of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this subclause (iii)(y) shall be reduced dollar-for-dollar by the amount of Indebtedness then outstanding under Section 4.09, exchange rate risk or commodity pricing risk6.01(b)(i) and (2) no Domestic Subsidiary other than a Loan Party shall at any time be an obligor under such Indebtedness;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (aiv) Indebtedness or Disqualified Stock arising under (x) the 2021 Senior Notes in an aggregate principal amount, when aggregated with the then outstanding amount of the Company and IndebtednessIndebtedness under subclause (b)(xv) incurred to refinance Indebtedness permitted by this subclause (b)(iv)(x), Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal not to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) exceed $845.0 million and (3)(Cy) the 2020 Senior Notes in an aggregate principal amount, when aggregated with the then outstanding amount of Section 4.07(aIndebtedness under subclause (b)(xv) hereof below incurred to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investmentsrefinance Indebtedness permitted by this subclause (b)(iv)(y), payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencenot to exceed $400.0 million, which when aggregated with provided that if the aggregate principal amount and liquidation preference of all the Repurchased Notes accepted for repurchase in the Tender Offer is less than $400.0 million, the aggregate principal amount of the 2020 Senior Notes permitted by this subclause (b)(iv)(y) shall be increased by the aggregate principal amount of the Redeemed Notes called for redemption through the irrevocable notice delivered on the Closing Date under Section 4.01(j) until such Redeemed Notes are redeemed; provided, further, that, in each case, no Person other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not than a Loan Party shall at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred an obligor under such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (iv) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of other than Indebtedness under the Senior ABL Credit FacilitiesAgreement, the 2020 Senior Notes and the 2021 Senior Notes, ) existing on the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicableClosing Date; provided that any portion of the net proceeds of such Refinancing Indebtedness that which is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock excess of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition $5.0 million individually or (y) Persons $25.0 million in the aggregate (when taken together with all other Indebtedness outstanding in reliance on this subclause (b)(v) that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(Ais not set forth on Schedule 6.01)) the Company would shall only be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
under this subclause (B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, orb)
Appears in 1 contract
Sources: Credit Agreement
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, provided that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to clause (c) of this Section 4.09(c) hereof4.09, any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for Holdings, the Company and its Restricted SubsidiariesSubsidiaries for Holdings’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 2.0 to 1.00 (the “Fixed Charge Coverage Test”)1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof shall will not apply to:
(1) the incurrence by the Company or any Restricted Subsidiary that is a Guarantor of Indebtedness under pursuant to Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing4,265,000,000;
(2) the incurrence by the Issuer Company and any Subsidiary Guarantor of Indebtedness represented by the Notes issued on the Issue Date and any replacement Notes therefor (not including any Additional Notes), including any Guarantee of the Notesthereof);
(3) Indebtedness of the Company, the Issuer Company and their its Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), ) and Disqualified Stock and Preferred Stock incurred or issued by the Company or any of its Restricted SubsidiariesSubsidiary and Preferred Stock issued by any Restricted Subsidiary, to finance the purchase, lease or improvement of property (real or personal) ), equipment or equipment other assets that is in each case are used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or or Preferred Stock incurred or issued and outstanding under this clause (4), not to exceed 4.0the greater of (a) $150,000,000 and (b) 3.0% of Total Assets (in each case, determined at the date of incurrence) at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bank guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or created in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; provided, provided that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts earn-outs or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)Subsidiary Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Subsidiary Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted Subsidiaries) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred StockStock not permitted by this clause (9);
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to under this Section 4.09Indenture, exchange rate risk or commodity pricing risk;
(11) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Company or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal that is a Guarantor in an aggregate principal amount or liquidation preference up to 200.0200% of the net cash proceeds received by the Company since immediately after the Transaction Issue Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(Bb) and (3)(Cc) of Section 4.07(a4.07(b)(3) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and ), and
(b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencepreference which, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed the greater of (i) $900.0 million 350,000,000 and (ii) 5.0% of Total Assets; provided that no more than the greater of (x) $300,000,000 and (y) 4.5% of Total Assets may be incurred by any Restricted Subsidiary that is not a Guarantor pursuant to this clause (12)(b) (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b12)(b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof the first paragraph of this covenant from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof the first paragraph of this covenant without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, Subsidiary of Indebtedness, the issuance by the Company or any Restricted Subsidiary of Disqualified Stock or the issuance by any Restricted Subsidiary of Preferred Stock which serves to extend, replace, refund, refinance, renew or defease any Indebtedness incurred or Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred issued as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause clauses (14) and (24) of this Section 4.09(b) or any Indebtedness, Indebtedness incurred or Disqualified Stock or Preferred Stock issued to so refund extend, replace, refund, refinance, renew or refinance defease such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, provided that such Refinancing Indebtedness:
(Aa) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded extended, replaced, refunded, refinanced, renewed or refinanced,defeased;
(Bb) if such Indebtedness is Subordinated Indebtedness or Disqualified Stock, has a final scheduled maturity date equal to or later than the final scheduled maturity date of such Subordinated Indebtedness or Disqualified Stock being so defeased, redeemed, repurchased, exchanged, acquired or retired;
(c) to the extent such Refinancing Indebtedness refinances extends, replaces, refunds, refinances, renews or defeases (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee thereof at least to the same extent as the Indebtedness being refinanced extended, replaced, refunded, refinanced, renewed or refunded defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,;
(Cd) in if the case of Indebtedness extended, replaced, refunded, refinanced, renewed or defeased is secured by any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit FacilitiesLiens, the NotesLiens securing such Indebtedness have the same priority as, and are limited to the same property and assets (including additional future assets and proceeds) subject to, the NXP Notes Liens securing such Indebtedness being so extended, replaced, refunded, refinanced, renewed or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicabledefeased; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(De) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of the Company or the IssuerCompany;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the IssuerSubsidiary Guarantor; or
(iii) Indebtedness or Disqualified Stock of the Company or Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) (a) Indebtedness or Disqualified Stock of the Company or, subject to the third paragraph of this covenant, Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred or issued to finance an acquisition or (yb) Indebtedness, Disqualified Stock or Preferred Stock of Persons that are acquired by the Company or any Restricted Subsidiary or merged into or amalgamated into consolidated with the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that in the case of clauses (a) and (b), after giving effect to such acquisition, merger merger, amalgamation or amalgamation either
consolidation, either (Ax) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
or (By) the Fixed Charge Coverage Ratio of for the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger merger, amalgamation or amalgamationconsolidation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit FacilitiesFacilities that is incurred under clause (1) of this Section 4.09(b), in a principal amount not in excess of the stated amount of such letter of credit;
(17) (Aa) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this IndentureIndenture or (b) any guarantee by a Restricted Subsidiary of Indebtedness of the Company; provided that such guarantee is incurred in accordance with Section 4.17 hereof;
(18) Indebtedness consisting of Indebtedness issued by the Company or any of its Restricted Subsidiaries to future, present or former employees, directors, officers, managers and consultants thereof, their respective Controlled Investment Affiliates or Immediate Family Members, in each case to finance the purchase or redemption of Equity Interests of the Company or any direct or indirect parent company of the Company to the extent described in clause (4) of Section 4.07(b) hereof;
(19) customer deposits and advance payments received in the ordinary course of business from customers for goods purchased in the ordinary course of business;
(20) Indebtedness in respect of Bank Products provided by banks or other financial institutions to the Company and its Restricted Subsidiaries in the ordinary course of business;
(21) Indebtedness incurred by a Restricted Subsidiary in connection with bankers’ acceptances, discounted bills of exchange or the discounting or factoring of receivables for credit management purposes, in each case incurred or undertaken in the ordinary course of business on arm’s length commercial terms on a recourse basis;
(22) Indebtedness of the Company or any of its Restricted Subsidiaries consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements in each case, incurred in the ordinary course of business;
(23) the incurrence of Indebtedness by Foreign Subsidiaries of the Company in an amount not to exceed at any one time outstanding and together with any other Indebtedness incurred under this clause (23), $100,000,000;
(24) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary incurred or issued to finance or assumed in connection with an acquisition in a principal amount not to exceed the greater of (a) $125,000,000 and (b) 2.5% of Tota
Appears in 1 contract
Sources: Indenture (Sabre Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (ai) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Issuer shall not permit any of its Restricted Subsidiary Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer and any Restricted Subsidiary of the Issuer may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Debt to Adjusted EBITDA Ratio on a consolidated basis of the Issuer for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 be less than or equal to 8.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:to (collectively, “Permitted Debt”):
(1i) the incurrence Incurrence by the Issuer or its Restricted Subsidiaries of Indebtedness under any Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreements and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $4,000.0 million outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus ;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer and (and, if applicable, any Guarantor Guarantors) of Indebtedness represented by the Notes notes (including the payment of PIK Interest through an increase in the principal amount of senior election notes and/or the issuance of PIK Notes, but not including any Additional Notesadditional notes) (and the Guarantees, as applicable) and any exchange notes (and exchange guarantees thereof), including any Guarantee of the Notes;
(3iii) Indebtedness of the Company, the Issuer and their its Restricted Subsidiaries in existence existing on the Issue Date or Date, including any Indebtedness Incurred on the Merger Issue Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b))) and under any Backstop Credit Facility;
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer to finance (whether prior to or within 270 days after) the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued and then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed 4.0the greater of (x) $450.0 million and (y) 4% of Total Assets at any time outstanding; so long as such Indebtedness exists of the Issuer at the date time of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, including including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company Issuer or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the Transactions or the disposition of any business, assets or a SubsidiarySubsidiary of the Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the obligations of the Issuer under the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary; provided, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations (excluding Hedging Obligations entered into other than for speculative purposes): (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; or (2) for the purpose of fixing or hedging currency exchange rate risk or commodity pricing riskwith respect to any currency exchanges;
(11xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and bonds, completion guarantees and the Lockheed Note provided by the Company Issuer or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) Issuer and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary of the Issuer not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencewhich, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed the greater of (x) $650.0 million and (y) 4% of Total Assets of the Issuer at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Incurred or issued under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which the Company Issuer or such the Restricted Subsidiary Subsidiary, as the case may be, could have incurred Incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a4.03(a) hereof without reliance on upon this clause (12)(bxii));
(13xiii) the incurrence any guarantee by the Company Issuer or a Restricted Subsidiary of Indebtedness or other obligations of the Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness or other Obligations by the Issuer or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Notes or any Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of Indebtednesssuch guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Notes or such Guarantor’s Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Notes or the Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Issuer which serves to refund or refinance or defease any Indebtedness, Indebtedness Incurred or Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a4.03(a) hereof and clauses (2ii), (3iii), (4iv), (xiv), (xv), (xix), (xx) and (12)(axxii) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock Stock, including additional any Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,refinanced and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Disqualified Stock and Preferred Stock being refunded or refinanced that was due on or after the date one year following the last maturity date of any Notes then outstanding were instead due on such date one year following the last date of maturity of any Notes then outstanding;
(B2) to the extent such Refinancing Indebtedness refinances (ia) Indebtedness subordinated or pari passu junior to the Notes or any Guarantee thereofNotes, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (iib) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,;
(C3) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium and fees Incurred in connection with such refinancing;
(4) shall not include Indebtedness of the Issuer or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(5) in the case of any Refinancing Indebtedness in respect Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of Indebtedness under the Senior Credit Facilitiesthis Section 4.03(b), the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required deemed to have been Incurred and to be incurred substantially contemporaneously with the related refinancing outstanding under such clause (iv) or (xx) of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoingthis Section 4.03(b), as applicable, within 45 days following the incurrence and not this clause (xiv) for purposes of determining amounts outstanding under such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect clauses (iv) and (xx) of the Senior Credit Facilitiesthis Section 4.03(b); and provided, such Notesfurther, NXP Notes or Existing Secured Note, or Refinancing Indebtedness that subclause (1) of any of the foregoing, as applicable, and
this clause (Dxiv) shall not include:apply to any refunding, refinancing or defeasance of (A) the Notes or (B) any Secured Indebtedness;
(ixv) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiary Subsidiaries or merged or amalgamated into the Company Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided provided, however, that such Indebtedness, Disqualified Stock or Preferred Stock is not Incurred in contemplation of such acquisition, merger or amalgamation; provided, further, however, that after giving effect to such acquisition, merger or amalgamation amalgamation, either:
(A1) the Company Issuer would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Debt to Adjusted EBITDA Ratio test set forth in Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Debt to Adjusted EBITDA Ratio of the Company and the Restricted Subsidiaries is Issuer would be less than or equal to or greater than such ratio immediately prior to such acquisition, merger or amalgamation;
(15xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse (except for Standard Securitization Undertakings) to the Issuer or any Restricted Subsidiary other than a Receivables Subsidiary;
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five Business Days of its incurrenceIncurrence;
(16xviii) Indebtedness of the Company Issuer or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the any Credit FacilitiesAgreement, in a principal amount not in excess of the stated amount of such letter of creditcredit or bank guarantee;
(17xix) Contribution Indebtedness;
(Axx) any guarantee by Indebtedness of Restricted Subsidiaries that are not Guarantors; provided, however, that the Company or a Restricted Subsidiary aggregate principal amount of Indebtedness Incurred under this clause (xx), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), does not exceed the greater of (x) $75.0 million and (y) 10% of the Total Assets of the Restricted Subsidiaries of Intelsat Sub Holdco that are not guarantors of any Indebtedness of the Issuer;
(xxi) Indebtedness of the Issuer or other obligations of any Restricted Subsidiary so long consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and
(xxii) Indebtedness of the Issuer or any of its Restricted Subsidiaries Incurred to repay, repurchase or refinance any of the Existing Subsidiary Notes or the Intelsat J▇▇▇▇▇▇ Unsecured Credit Agreement.
(c) For purposes of determining compliance with this Section, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of one or more of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (i) through (xxii) above or is entitled to be Incurred pursuant to Section 4.03(a), the Issuer shall, in its sole discretion divide, classify or reclassify or later divide, classify or reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock in any manner that complies with this Section and such item of Indebtedness, Disqualified Stock or Preferred Stock shall be treated as having been Incurred pursuant to one or more of such clauses or pursuant to Section 4.03(a); provided that all Indebtedness under the Credit Agreements outstanding on the Issue Date shall be deemed to have been Incurred pursuant to Section 4.03(b)(i). Accrual of interest, the accretion of accreted value, amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the incurrence case may be, was in compliance with this Section. For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. Dollar Equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness incurred by was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. Dollar Equivalent), in the case of revolving credit debt; provided that if such Restricted Subsidiary Indebtedness is permitted under the terms of this IndentureIncurred to refinance other Indebtedness denominated in a foreign currency, orand su
Appears in 1 contract
Sources: Indenture (Intelsat LTD)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The (i) the Company shall not, and shall not permit any of its the Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock Stock; and will (ii) the Company shall not permit any of the Restricted Subsidiary Subsidiaries (other than any Guarantor) to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and any Guarantor may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary that is not a Guarantor may incur Incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and or issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of the Company for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided, that the amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors, together with any Refinancing Indebtedness in respect thereof, shall not exceed, in the aggregate, the greater of $50 million and 20% of Consolidated EBITDA as of the date on which such Indebtedness is Incurred (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount).
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) (A) the incurrence Incurrence by the Company or any Restricted Subsidiary of Indebtedness under the ABL Credit Facilities Agreement up to an aggregate principal amount outstanding (including the face amount of letters of credit and bankers’ acceptances thereunder) at the time of Incurrence that, together with the aggregate principal amount of Indebtedness outstanding under clause (xvi) below at the time of incurrence, does not exceed an amount equal to the greater of (x) $250 million and (y) the Borrowing Base; provided that the foregoing shall not prohibit discretionary protective advances made under the ABL Credit Agreement in an amount not to exceed 10% in excess of the amount otherwise permitted under this clause (i)(A) at the time of such advance, and (B) the Incurrence by the Company, the Issuer Company or any other Restricted Subsidiary and of Indebtedness under the Term Credit Agreement (including the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, thereunder) up to an aggregate principal amount outstanding at any one time, when taken together with the aggregate principal time of Incurrence that does not exceed an amount equal to (or, if issued with original issue discount, x) $188.5 million plus (y) the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, greater of (i1) $5,250.0 million75 million and (2) an amount of Secured Indebtedness which, plus on a pro forma basis after giving effect to the incurrence thereof (without giving effect to the netting of proceeds thereof) would not cause the Consolidated Secured Net Leverage Ratio to exceed 3.25 to 1.0;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer Company and any Guarantor the Guarantors of Indebtedness represented by the Initial Notes (not including any Additional Notes), including any Guarantee of and the NotesGuarantees;
(3iii) Indebtedness of the CompanyIndebtedness, the Issuer Preferred Stock and their Subsidiaries in existence Disqualified Stock existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b));
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock synthetic lease obligations, mortgage financings and Preferred Stock incurred purchase money obligations) Incurred by the Company or any of its Restricted SubsidiariesSubsidiary, Disqualified Stock issued by the Company or any Restricted Subsidiary and Preferred Stock issued by any Restricted Subsidiary to finance (whether prior to or within 270 days after) all or any part of the purchaseacquisition, lease lease, construction, repair, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate assets) that, when aggregated with the principal amountamount or liquidation preference of all other Indebtedness, Disqualified Stock or Preferred Stock then outstanding and Incurred pursuant to this clause (iv), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xiv) below, does not exceed at any one time outstanding the greater of $50 million and all other 20% of Consolidated EBITDA as of the date such Indebtedness is Incurred (plus, in the case of any Refinancing Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4the Additional Refinancing Amount), not to exceed 4.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5v) Indebtedness incurred Incurred by the Company or any of its Restricted Subsidiaries Subsidiary constituting reimbursement obligations with respect to letters of credit and bank guarantees issued in the ordinary course of business, and arrangements in connection therewith, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental law or permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6vi) Indebtedness arising from agreements of the Company or its any Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of acquisition or purchase price, earnouts price or similar obligationsobligations (including earn-outs), in each case, incurred Incurred or assumed in connection with the Transactions, any Investments or any acquisition or disposition of any business, assets or a SubsidiarySubsidiary not prohibited by this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company to a Restricted Subsidiary; , provided that (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of the Company and its Subsidiaries) any such Indebtedness owing owed to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the obligations of the Company under the Notes; provided further provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to any pledge of such Indebtedness constituting a Permitted Lien but not the Company or another Restricted Subsidiarytransfer thereof upon foreclosure) shall be deemed, in each case, to be an incurrence Incurrence of such IndebtednessIndebtedness not permitted by this clause (vii);
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred StockStock not permitted by this clause (viii);
(10ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of the Company and its Subsidiaries), such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien but not the transfer thereof upon foreclosure) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (ix);
(x) Hedging Obligations (excluding Hedging Obligations entered into that are not incurred for speculative purposespurposes but (A) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (C) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases or sales and, in each case, extensions or replacements thereof;
(11xi) obligations (including reimbursement obligations with respect to letters of credit, bank guarantees, warehouse receipts and similar instruments) in respect of performance, bid, appeal and surety bonds and bonds, completion guarantees and similar obligations provided by the Company or any of its Restricted Subsidiaries Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(12) (axii) Indebtedness or Disqualified Stock of the Company and or Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), together with any Refinancing Indebtedness in respect thereof incurred pursuant to clause (xiv) below, does not exceed at any one time outstanding exceed the greater of $900.0 150 million and 60% of Consolidated EBITDA as of the date such Indebtedness is Incurred (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount) (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred Indebtedness Incurred pursuant to this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which the Company Company, or such the Restricted Subsidiary Subsidiary, as the case may be, could have incurred Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii)); provided, that the amount of Indebtedness, Disqualified Stock or and Preferred Stock under Section 4.09 (a) hereof without reliance on that may be Incurred or issued, as applicable, pursuant to this clause (12)(b)xii) by Restricted Subsidiaries that are not Guarantors, and any Refinancing Indebtedness of Restricted Subsidiaries that are not Guarantors incurred in respect thereof, shall not exceed, in the aggregate, the greater of $50 million and 20% of Consolidated EBITDA (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);
(13xiii) the incurrence any guarantee by the Company or any Restricted Subsidiary of Indebtedness or other obligations of the Company or any Restricted Subsidiary so long as the Incurrence of such Indebtedness Incurred by the Company or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that (A) if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee with respect to such Indebtedness shall be subordinated in right of Indebtednesspayment to the Notes or such Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Notes or the Guarantee, as applicable, and (B) if such guarantee is of Indebtedness of the Company, such guarantee is Incurred in accordance with, or not in contravention of, Section 4.11 solely to the extent Section 4.11 is applicable;
(xiv) the Incurrence by the Company or any of the Restricted Subsidiaries of Indebtedness or Disqualified Stock, or by any Restricted Subsidiary of Preferred Stock of a Restricted Subsidiary, that serves to refund, refinance, renew, replace or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock which serves issued as permitted under Section 4.03(a) and clauses (i)(B)(y)(2), (ii), (iii), (iv), (xii), (xiv), (xv) and (xix) of this Section 4.03(b) up to refund the outstanding principal amount (or, if applicable, the liquidation preference, face amount, or refinance any Indebtednessthe like) or, if greater, committed amount (only to the extent the committed amount could have been Incurred on the date of initial Incurrence and was deemed Incurred at such time for the purposes of this Section 4.03) of such Indebtedness or Disqualified Stock or Preferred Stock, in each case at the time such Indebtedness was Incurred or Disqualified Stock or Preferred Stock incurred as permitted under was issued pursuant to Section 4.09(a4.03(a) hereof and or clauses (2i)(B)(y)(2), (3ii), (4iii), (iv), (xii), (xiv), (xv) and (12)(axix) of this Section 4.09(b4.03(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including Stock, plus any additional Indebtedness, Disqualified Stock or Preferred Stock incurred Incurred to pay premiums (including reasonable tender premiums), accrued and unpaid interest, expenses, defeasance costs and fees (including consent fees) in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded refunded, refinanced or refinanced,defeased and (y) 91 days following the Stated Maturity of the Notes (provided that this subclause (1) will not apply to any refunding or refinancing of any Secured Indebtedness);
(B2) to the extent such Refinancing Indebtedness refinances (ia) Indebtedness subordinated or pari passu junior to the Notes or any Guarantee thereofa Guarantee, as applicable, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes or the Guarantee at least to the same extent Guarantee, as the Indebtedness being refinanced or refunded applicable, or (iib) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be is Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D3) shall not include:
include (ix) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of a Restricted Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of the Company or the Issuer;
a Guarantor, or (iiy) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of an Unrestricted Subsidiary;
(14xv) Indebtedness, Disqualified Stock or Preferred Stock of (xA) the Company or, subject to Section 4.09 (c) hereof, a or any Restricted Subsidiary incurred to finance an acquisition or (yB) Persons that are acquired by the Company or any Restricted Subsidiary or merged are merged, consolidated or amalgamated with or into the Company or a any Restricted Subsidiary in accordance with the terms of this IndentureIndenture (so long as such Indebtedness is not incurred in contemplation of such acquisition, merger, consolidation or amalgamation); provided that after giving effect to such acquisitionacquisition or merger, merger consolidation or amalgamation amalgamation, either:
(A1) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater would be no less than immediately prior to such acquisitionacquisition or merger, merger consolidation or amalgamation;
(15xvi) Indebtedness Incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse to the Company or any Restricted Subsidiary other than a Securitization Subsidiary (except for Standard Securitization Undertakings); provided that the amount of Indebtedness outstanding under this clause (xvii) shall not exceed, when aggregated with all Indebtedness outstanding under clause (i) at the time of Incurrence, the maximum amount permitted under clause (i);
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, ori
Appears in 1 contract
Sources: Indenture (Wabash National Corp /De)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (ai) The Company Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) and the Company will not or issue any shares of Disqualified Stock and will Stock; and
(ii) Holdings shall not permit any of its Restricted Subsidiary Subsidiaries to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company and Holdings and any Restricted Subsidiary that is a Guarantor may incur Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, Stock and the Company and Holdings and any Restricted Subsidiary that is a Guarantor may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis of Holdings for the Company and its Restricted Subsidiaries’ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurredIncurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of limitations set forth in Section 4.09(a4.03(a) hereof shall not apply to:
(1i) the incurrence Incurrence by Holdings or its Restricted Subsidiaries of Indebtedness under the Credit Facilities by the Company, the Issuer or any other Restricted Subsidiary Agreement and the issuance and creation of letters of credit and bankers’ ' acceptances thereunder (with letters of credit and bankers’ ' acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, ) up to an aggregate principal amount of $1,950 million outstanding at any one time, when taken together less the amount of any such Indebtedness permanently retired with the aggregate principal amount (or, if issued with original issue discount, Net Proceeds from any Asset Sale applied from and after the accreted value) of Existing Secured Notes, Issue Date to reduce the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus outstanding amounts pursuant to Section 4.06;
(ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence Incurrence by the Issuer Company and any Guarantor the Guarantors of Indebtedness represented by (A) the Original Securities and the Senior Guarantees, as applicable, (B) the Exchange Securities issued in exchange for the Original Securities and the Senior Guarantees thereof, and (C) the Senior Subordinated Notes (not including any Additional Notes)and the related guarantees, including any Guarantee of the Notesas applicable;
(3iii) Indebtedness of the Company, the Issuer and their Subsidiaries in existence existing on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1i) and (2ii) of this Section 4.09(b4.03(b));
(4iv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred ) Incurred by the Company Holdings or any of its Restricted Subsidiaries, Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) in an aggregate principal amountamount which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and Indebtedness then outstanding under that was Incurred pursuant to this clause (4iv), does not to exceed 4.03% of Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterIncurrence;
(5v) Indebtedness incurred Incurred by the Company Holdings or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including including, without limitation, letters of credit in respect of workers’ ' compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ ' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtednesscredit, such obligations are reimbursed within 30 days following such drawing or incurrencedrawing;
(6vi) Indebtedness arising from agreements of the Company Holdings or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, in each case, incurred or assumed Incurred in connection with the disposition of any business, assets or a SubsidiarySubsidiary of Holdings in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7vii) Indebtedness of the Company Holdings to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notesobligations of Holdings under its Senior Guarantee; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemedprovided, in each casefurther, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Holdings or another of its Restricted SubsidiariesSubsidiary) shall be deemed deemed, in each case case, to be an issuance of such shares of Preferred Stock;
(10ix) Indebtedness of a Restricted Subsidiary to Holdings or another Restricted Subsidiary; provided that (1) any such Indebtedness is made pursuant to an intercompany note and (2) if a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor such Indebtedness is subordinated in right of payment to the Senior Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary lending such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are Incurred in the ordinary course of business (excluding Hedging Obligations entered into and not for speculative purposes): (1) for the purpose of limiting fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09, outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity pricing riskprice risk with respect to any commodity purchases;
(11xi) obligations in respect of performance, bid, appeal bid and surety bonds and completion guarantees provided by the Company Holdings or any of its Restricted Subsidiaries Subsidiary in the ordinary course of business;
(12) (axii) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company Holdings or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary Holdings not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencewhich, which when aggregated with the principal amount and or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and incurred Incurred pursuant to this clause (12)(bxii), does not exceed $175 million at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to Indebtedness Incurred under this clause (12) (bxii) shall cease to be deemed incurred Incurred or outstanding for purposes of this clause (12)(bxii) but shall be deemed incurred Incurred for the purposes of Section 4.09(a4.03(a) hereof from and after the first date on which Holdings, or the Company or such Restricted Subsidiary Subsidiary, as the case may be, could have incurred Incurred such Indebtedness, Disqualified Stock or Preferred Stock Indebtedness under Section 4.09 (a4.03(a) hereof without reliance on upon this clause (12)(bxii));
(13xiii) the incurrence any guarantee by the Company or a Guarantor of Indebtedness or other obligations of Holdings or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by Holdings or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Securities or the Senior Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of Indebtednesssuch Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantor's Senior Guarantee with respect to the Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Senior Guarantee of such Restricted Subsidiary, Disqualified Stock as applicable;
(xiv) the Incurrence by Holdings or Preferred Stock any of its Restricted Subsidiaries of Indebtedness which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred Indebtedness Incurred as permitted under Section 4.09(a4.03(a) hereof and clauses (2ii), (3iii), (4iv), (xv) and (12)(axx) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock Indebtedness issued to so refund or refinance such IndebtednessIndebtedness (subject to the following proviso, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “"Refinancing Indebtedness”") prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(A1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred Incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock Indebtedness being refunded or refinanced,;
(B2) has a Stated Maturity which is no earlier than the Stated Maturity of the Indebtedness being refunded or refinanced;
(3) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu junior to the Notes Securities or any the Senior Guarantee thereofof such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is subordinated or pari passu junior to the Notes Securities or the Senior Guarantee at least of such Restricted Subsidiary, as applicable;
(4) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the same extent as aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium and fees Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of Holdings that is not the Company or refunded a Guarantor that refinances Indebtedness of the Company or a Guarantor, or (iiy) Disqualified Stock Indebtedness of Holdings or Preferred Stock, such Refinancing a Restricted Subsidiary that refinances Indebtedness must be Disqualified Stock or Preferred Stock, respectively,of an Unrestricted Subsidiary; and
(C6) in the case of any Refinancing Indebtedness in respect Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of Indebtedness under the Senior Credit Facilitiesthis Section 4.03(b), the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required deemed to have been Incurred and to be incurred substantially contemporaneously with the related refinancing outstanding under such clause (iv) or (xx) of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoingthis Section 4.03(b), as applicable, within 45 days following the incurrence and not this clause (xiv) for purposes of determining amounts outstanding under such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect clauses (iv) and (xx) of the Senior Credit Facilitiesthis Section 4.03(b); provided, such Notesfurther, NXP Notes or Existing Secured Note, or Refinancing Indebtedness that subclauses (1) and (2) of any of the foregoing, as applicable, and
this clause (Dxiv) shall not include:
(i) apply to any refunding or refinancing of any Secured Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(iixv) Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Holdings or any of its Restricted Subsidiary Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided provided, however, that such Indebtedness or Disqualified Stock is not Incurred in contemplation of such acquisition or merger or to provide all or a portion of the funds or credit support required to consummate such acquisition or merger; provided, further, however, that after giving effect to such acquisition, merger or amalgamation acquisition and the Incurrence of such Indebtedness either:
(A1) the Company Holdings would be permitted to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, 4.03(a); or
(B2) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or would be greater than immediately prior to such acquisition, merger or amalgamation;
(15xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to Holdings or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, ; provided that such Indebtedness is extinguished within five two Business Days of its incurrenceIncurrence;
(16xviii) Indebtedness of the Company Holdings or any of its Restricted Subsidiaries Subsidiary supported by a letter of credit issued pursuant to the Credit FacilitiesAgreement, in a principal amount not in excess of the stated amount of such letter of credit;
(17xix) Contribution Indebtedness;
(xx) (A) any guarantee by if Holdings could Incur $1.00 of additional Indebtedness pursuant to Section 4.03(a) after giving effect to such borrowing, Indebtedness of Foreign Subsidiaries not otherwise permitted hereunder or (B) if Holdings could not Incur $1.00 of additional Indebtedness pursuant to Section 4.03(a) after giving effect to such borrowing, Indebtedness of Foreign Subsidiaries of the Company or a Restricted Subsidiary Incurred for working capital purposes, provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (xx), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), does not exceed the greater of (x) $125 million and (y) 10% of the consolidated assets of the Foreign Subsidiaries; and
(xxi) Indebtedness of Holdings or other obligations of any Restricted Subsidiary so long consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business.
(c) Notwithstanding the foregoing, neither the Company nor any Guarantor may Incur any Indebtedness pursuant to Section 4.03(b) if the proceeds thereof are used, directly or indirectly, to repay, prepay, redeem, defease, retire, refund or refinance any Subordinated Indebtedness unless such Indebtedness shall be subordinated to the Securities or such Guarantor's Senior Guarantee, as applicable, to at least the same extent as such Subordinated Indebtedness. For purposes of determining compliance with this Section 4.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xxi) above or is entitled to be Incurred pursuant to Section 4.03(a), Holdings shall, in its sole discretion, classify or reclassify such item of Indebtedness in any manner that complies with this Section 4.03 and such item of Indebtedness shall be treated as having been Incurred pursuant to only one of such clauses or pursuant to Section 4.03(a); provided that all Indebtedness under the Credit Agreement outstanding on the Issue Date shall be deemed to have been Incurred pursuant to clause (i) and Holdings shall not be permitted to reclassify all or any portion of such Indebtedness. Accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.03. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which are otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of case may be, was in compliance with this Indenture, orSection 4.03.
Appears in 1 contract
Sources: Indenture (Nalco Energy Services Equatorial Guinea LLC)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company Borrower will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, that the Company Borrower may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company Borrower and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”), determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-four quarter period.
(b) The provisions of Section 4.09(a6.07(a) hereof shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer Borrower or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount of $2,060.0 million outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancing;
(2) the incurrence by the Issuer Borrower and any Guarantor of Indebtedness represented by the Notes Loans (not including any Additional Notes), including any Guarantee of the Notes;
(3) Indebtedness of the Company, the Issuer and their Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b)Guarantee);
(4) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Company or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), not to exceed 4.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter;
(5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(6) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b), does not at any one time outstanding exceed $900.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence by the Company or any Restricted Subsidiary, of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under Section 4.09(a) hereof and clauses (2), (3), (4) and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (A) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Sources: Senior Unsecured Term Loan Agreement (Catalent Pharma Solutions, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) ), and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Consolidated Fixed Charge Coverage Ratio on a consolidated basis for the Company Issuer and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a4.10(a) hereof shall not apply to:to (collectively, “Permitted Indebtedness”):
(1) the incurrence by the Issuer or a Restricted Subsidiary of Indebtedness under Credit Facilities together with the incurrence by the Company, the Issuer or any other Restricted Subsidiary of the guarantees thereunder and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to an aggregate principal amount, equal to (x) the greater of (i) $2,500.0 million and (ii) the Borrowing Base outstanding at any Refinancing one time, plus (y) $700.0 million, plus (z) additional Indebtedness in respect thereof and Guarantees under Credit Facilities or in respect of such Indebtedness, Additional Notes up to an aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 700.0 million, plus (ii) €750.0 millionless, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause clauses (1x)(i), (y) or any portion thereofand (z), the aggregate amount of feesall mandatory principal payments or repurchases (with respect to revolving borrowings and letters of credit, underwriting discounts, premiums and other costs and expenses Incurred only to the extent revolving commitments are correspondingly reduced) actually made by the borrower thereunder in connection respect of Indebtedness thereunder with such refinancingnet proceeds from asset sales;
(2) the incurrence by Indebtedness of the Issuer and any Guarantor its Restricted Subsidiaries in respect of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee of issued on the Notes;
(3) Issue Date and other Indebtedness of the Company, the Issuer and their Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1Section 4.10(b)(1) and (2) of this Section 4.09(b)hereof);
(43) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and or Preferred Stock incurred by the Company Issuer or any of its Restricted Subsidiaries, Subsidiary to finance the purchase, lease lease, construction, or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, Permitted Business (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) in an aggregate principal amountamount that, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or Preferred Stock issued then outstanding and outstanding under incurred pursuant to this clause (4), 3) does not to exceed 4.0% of Total Assets at any time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafter$250.0 million;
(54) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries Subsidiary constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims; provided, provided that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(65) Indebtedness arising from agreements of the Company Issuer or its a Restricted Subsidiaries Subsidiary providing for indemnification, adjustment of purchase price, earnouts earn-outs or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; providedprovided that in the case of a disposition, that
(A) such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of such non-cash noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company Issuer and its any Restricted Subsidiaries in connection with such a disposition;
(76) Indebtedness of the Company Issuer owed to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by the Issuer or any other Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another a Restricted Subsidiary) shall be deemed, in each case, to be an constitute the incurrence of such IndebtednessIndebtedness by the issuer thereof;
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer), such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness;
(97) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its a Restricted SubsidiariesSubsidiary) shall be deemed in each case to be an issuance of such shares of Preferred Stock;
(10) 8) Hedging Obligations of the Issuer or any Restricted Subsidiary (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting limiting, hedging or managing (A) interest rate risk rates with respect to any Indebtedness that is permitted by the terms of this Indenture to be incurred pursuant to this Section 4.09outstanding, (B) currency exchange rate risk rates or (C) commodity pricing riskprices or otherwise entered into in the ordinary course of business (in each case, including Hedging Obligations on behalf of the Issuer, any Restricted Subsidiary, Parent or any Subsidiary of Parent);
(119) obligations in respect of performance, bidperformance and surety bonds, appeal bonds and surety other similar types of bonds and performance and completion guarantees provided by the Company Issuer or any Restricted Subsidiary or obligations in respect of its Restricted Subsidiaries letters of credit related thereto, in each case in the ordinary course of businessbusiness or consistent with past practice;
(12) (a10) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock Issuer or any Restricted Subsidiary or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencepreference which, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b10), does not at any one time outstanding exceed $900.0 million 100.0 million;
(it being understood that 11) any Indebtedness, Disqualified Stock guarantee by the Issuer or Preferred Stock a Restricted Subsidiary of Indebtedness or other obligations of the Issuer or any Restricted Subsidiary so long as the incurrence of such Indebtedness or other obligations incurred pursuant to by such Restricted Subsidiary is permitted under the terms of this clause Indenture;
(12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b));
(13) the incurrence or issuance by the Company Issuer or any Restricted Subsidiary, Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which that serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued as permitted under Section 4.09(a4.10(a) hereof and clauses (2), (3), (4Section 4.10(b)(2) hereof and (12)(a) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b12) or any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock Stock, including additional Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to pay accrued interest, premiums (including reasonable tender premiums), defeasance costs and fees and expenses in connection therewith prior to its respective maturity (the “Refinancing Indebtedness”) prior to its respective maturity); provided, provided that such Refinancing Indebtedness:
Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
, (B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances include Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the Issuer; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary, and (C) shall not be in a principal amount in excess of the principal amount of, premium, if any, accrued interest on, and related fees and expenses of, the Indebtedness being refunded or refinanced;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or amalgamation either
(A) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test set forth in Section 4.09(a) hereof, or
(B) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(1513) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business;
(14) Indebtedness consisting of promissory notes issued by the Issuer or any Restricted Subsidiary to current or former officers, provided that such Indebtedness is extinguished within five Business Days directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of the Issuer or any of its incurrencedirect or indirect parent corporations permitted by Section 4.07 hereof;
(15) Indebtedness of the Issuer or any Restricted Subsidiary consisting of the financing of insurance premiums in the ordinary course of business or take or pay obligations contained in supply agreements incurred in the ordinary course of business;
(16) Indebtedness of the Company Issuer or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the any Credit FacilitiesFacility, in a principal amount not in excess of the stated amount of such letter of credit;
(17) Indebtedness consisting of deferred purchase price or notes issued to officers, directors and employees of Restricted Subsidiaries to purchase or redeem equity interests (Aor option or warrants or similar instruments) any guarantee by of the Company Issuer or a Restricted Subsidiary;
(18) Indebtedness issued as consideration for the repurchase or redemption of Capital Stock (other than Disqualified Stock) of Parent in transactions to repurchase or redeem Capital Stock (other than Disqualified Stock) of Parent (or its direct parent company) held by officers, directors or employees or former officers, directors or employees (or their transferees, estates or beneficiaries under their estates) of Parent or any Subsidiary thereof, upon their death, disability, retirement, severance or termination of Indebtedness employment or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is service; and
(19) guarantees constituting Investments permitted under the terms of this Indenture. For purposes of determining compliance with this Section 4.10, orin the event that an item of proposed Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of Permitted Indebtedness pursuant to clauses (1) through (19) of Section 4.10(b) hereof, or is entitled to be incurred pursuant to Section 4.10(a) hereof, the Issuer shall be permitted to classify and later reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock in any manner that complies with this Section 4.10; and such item of Indebtedness, Disqualified Stock or Preferred Stock will be treated as having been incurred pursuant to only one of such categories; provided, that all Indebtedness outstanding under the Credit Facilities on the Issue Date will be treated as incurred under clause (1) of this Section 4.10(b). Accrual of interest or dividends, the accretion of accreted value and the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this Section 4.10. For purposes of determining compliance with any U.S. dollar restriction on the incurrence of Indebtedness where the Indebtedness incurred is denominated in a different currency, the amount of such Indebtedness will be the U.S. dollar equivalent determined on the date of the incurrence of such Indebtedness; provided that if any such Indebtedness denominated in a different currency is subject to a currency agreement with respect to U.S. dollars covering all principal, premium, if any, and interest payable on such Indebtedness, the amount of such Indebtedness expressed in U.S. dollars will be as provided in such currency agreement. The principal amount of any Refinancing Indebtedness incurred in the same currency as the Indebtedness being refinanced will be the U.S. dollar equivalent of the Indebtedness being refinanced, except to the extent that (1) such U.S. dollar equivalent was determined based on a currency agreement, in which case the Refinancing Indebtedness will be determined in accordance with the preceding sentence, and (2) the principal amount of the Refinancing Indebtedness exceeds the principal amount of the Indebtedness being refinanced, in which case the U.S. dollar equivalent of such excess will be determined on the date such Refinancing Indebtedness is incurred. The maximum amount of Indebtedness that the Issuer and its Restricted Subsidiaries may incur pursuant to this covenant shall not be deemed to be exceeded, with respect to any outstanding Indebtedness, solely as a result of fluctuations in the exchange rate of currencies. Notwithstanding anything to the contrary, the Issuer shall not, and shall not permit any Guarantor to, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness) that is subordinated or junior in right of payment to any Indebtedness of the Issuer or such Guarantor, as the case may be, unless such Indebtedness is expressly subordinated in right of payment to the Notes or such Guarantor’s Guarantee to the extent and in the same manner as such Indebtedness is subordinated to other Indebtedness of the Issuer or such Guarantor, as the case may be. This Indenture will not treat (1) unsecured Indebtedness as subordinated or junior to Secured Indebtedness merely because it is unsecured or (2) Senior Indebtedness as subordinated or junior to any other Senior Indebtedness merely because it has a junior priority with respect to the same collateral.
Appears in 1 contract
Sources: Indenture (Toys R Us Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently contingently, or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and the Company will Issuer shall not issue any shares of Disqualified Stock and will shall not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, provided that the Company Issuer may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio on a consolidated basis for the Company Issuer and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter periodthe most recently ended four fiscal quarters for which internal financial statements are available; provided, further, that the amount of Indebtedness (including Acquired Indebtedness), Disqualified Stock and Preferred Stock that may be incurred or issued, as applicable, pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors shall not (together with any Refinancing Indebtedness in respect thereof) exceed the greater of (x) $150.0 million and (y) 3.50% of Total Assets at any one time outstanding.
(b) The provisions of subsection (a) of this Section 4.09(a) hereof 4.09 shall not apply to:
(1) the incurrence of Indebtedness under Credit Facilities by the Company, the Issuer or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof); provided that immediately after giving effect to any such incurrence, and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an the then outstanding aggregate principal amount outstanding at any one time, when taken together with the aggregate principal amount (or, if issued with original issue discount, the accreted value) of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any all Indebtedness permitted under this clause (1) or does not exceed at any portion thereof, the aggregate one time an amount equal to (a) $2,750.0 million and (b) an additional amount of fees, underwriting discounts, premiums Secured Indebtedness provided that the Consolidated Secured Debt Ratio does not exceed 3.50 to 1.00 (after giving pro forma effect to the incurrence of such Indebtedness and other costs and expenses Incurred in connection with such refinancingthe application of the net proceeds therefrom);
(2) the incurrence by the Issuer and any Guarantor of Indebtedness represented by the Notes (not including any Additional Notes), including any Guarantee ) and the Guarantees thereof in respect of the NotesNotes issued and outstanding on the Issue Date;
(3) Indebtedness of the Company, the Issuer and their its Restricted Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses clause (1) and or (2) of this Section 4.09(b));
(4) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and Preferred Stock incurred or issued by the Company Issuer or any of its Restricted Subsidiaries, to finance the purchase, lease lease, construction or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets, in an aggregate principal amountamount or liquidation preference which, together when aggregated with any Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness, Disqualified Stock and/or and Preferred Stock issued then outstanding and outstanding together with any other Indebtedness incurred under this clause (4), does not to exceed 4.0the greater of (a) $200 million and (b) 4.9% of the Total Assets at any the time outstanding; so long as such Indebtedness exists at the date of such purchase, lease or improvement or is created within 270 days thereafterincurrence;
(5) Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit credit, bankers’ acceptances, bank guarantees, warehouse receipts or similar facilities issued or entered into in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, that upon the drawing of such letters of credit performance or the incurrence of such Indebtednesssurety bonds, such obligations are reimbursed within 30 days following such drawing health, disability or incurrenceother employee benefits or property, casualty or liability insurance or self-insurance;
(6) Indebtedness arising from agreements of the Company Issuer or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligationsobligations (including earn-outs or deferred compensation arrangements), in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
provided that (Aa) such Indebtedness is not reflected on the balance sheet of the Company Issuer or any of its Restricted Subsidiaries (contingent obligations it being understood that Contingent Obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed not to be reflected on such balance sheet for purposes of this clause (6)) and (a)); and
(Bb) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value (as determined in good faith by the Issuer) of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company Issuer and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor (other than the Issuer) is expressly subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any the Restricted Subsidiary holding such Indebtedness of the Issuer ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that if a Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another Restricted Subsidiary; , provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another of its Restricted Subsidiaries) shall be deemed in each case to be an issuance of such shares of Preferred StockStock not permitted by this clause (9);
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing riskrisk (excluding Hedging Obligations entered into for speculative purposes);
(11) obligations in respect of performance, bid, appeal supersedeas and surety bonds and completion guarantees and similar obligations provided by the Company Issuer or any of its Restricted Subsidiaries Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of businessbusiness or consistent with past practice;
(12) (a) Indebtedness or Disqualified Stock of the Company Issuer and Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which which, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b12), does not at any one time outstanding exceed the greater of (a) $900.0 250.0 million and (b) 6.0% of Total Assets (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes of this clause (12)(b12) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company Issuer or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 subsection (a) hereof of this Section 4.09 without reliance on this clause (12)(b12));
(13) the incurrence or issuance by the Company Issuer or any Restricted Subsidiary, Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock which serves to refund or refinance refinance:
(a) any Indebtedness, Disqualified Stock or Preferred Stock incurred as permitted under subsection (a) of this Section 4.09(a) hereof 4.09 and clauses (2), (3), (4) and (12)(a3) of this Section 4.09(b), this clause (13) and clause (14) of this Section 4.09(b), or
(b) or any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to so refund or refinance such the Indebtedness, Disqualified Stock or Preferred Stock including described in clause (a) of this Section 4.09(b)(13), including, in each case, additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay premiums (including reasonable tender premiums), defeasance costs costs, accrued interest and fees and expenses in connection therewith (collectively, the “Refinancing Indebtedness”) prior to its respective maturity; provided, provided that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced,
(B) the principal amount (or accreted value, if applicable) of such Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness refinanced or refunded (plus all amounts to pay premiums (including tender premiums), defeasance costs, underwriting discounts, commissions, accrued interest and fees and expenses in connection therewith),
(C) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated or pari passu in right of payment to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated or pari passu in right of payment, as the case may be, to the Notes or the Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(D) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the Issuer;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company Issuer that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the IssuerGuarantor; or
(iii) Indebtedness, Disqualified Stock or Preferred Stock of the Company Issuer or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company Issuer or any Restricted Subsidiary or merged into or amalgamated into consolidated with the Company Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that (i) such Indebtedness, Disqualified Stock or Preferred Stock is an aggregate principal amount or liquidation preference not to exceed $100.0 million at any time outstanding plus (ii) an unlimited amount of additional Indebtedness, Disqualified Stock or Preferred Stock if after giving effect to such acquisition, merger or amalgamation consolidation, either:
(Aa) the Company Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in subsection (a) of this Section 4.09(a) hereof4.09, or
(Bb) the Fixed Charge Coverage Ratio of the Company Issuer and the its Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamationconsolidation;
(15) Indebtedness arising (a) from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of notice of its incurrence; and (b) as a result of the endorsement in the ordinary course of business of negotiable instruments in the course of collection;
(16) Indebtedness of the Company Issuer or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (Aa) any guarantee by the Company Issuer or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture, or
Appears in 1 contract
Sources: Indenture (Hill-Rom Holdings, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectivelyeach instance thereof, an “incurrence”) ), with respect to any Indebtedness (including Acquired Indebtedness) ), and the Company will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Company may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and, subject to Section 4.09(c) hereof, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Ratio on a consolidated basis for the Company and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 (the “Fixed Charge Coverage Test”)1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof shall not apply toprohibit the incurrence of any of the following items of Indebtedness:
(1) the incurrence of Indebtedness under pursuant to Credit Facilities by the Company, the Issuer Company or any other of its Restricted Subsidiary Subsidiaries and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and any Refinancing Indebtedness in respect thereof and Guarantees in respect of such Indebtedness, up to an aggregate principal amount outstanding at any one time, when taken together time outstanding not to exceed the greater of (a) $1,050 million and (b) 250.0% of the EBITDA of the Company and its Restricted Subsidiaries on a consolidated basis for the most recently ended four fiscal quarters ending immediately prior to the date of such incurrence for which internal financial statements are available determined on a pro forma basis in a manner consistent with the aggregate principal amount (or, if issued with original issue discount, the accreted value) definition of Existing Secured Notes, the NXP Notes and Notes then outstanding, of (i) $5,250.0 million, plus (ii) €750.0 million, plus (iii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such refinancingFixed Charge Coverage Ratio;
(2) the incurrence by the Issuer Company and any Subsidiary Guarantor of Indebtedness represented by under the Notes (not including Guarantees thereof) (other than any Additional Notes), ) and any notes (including any Guarantee of Guarantees thereof) issued in exchange for the NotesNotes pursuant to a registration rights agreement;
(3) Indebtedness of the Company, the Issuer and their Subsidiaries in existence on the Issue Date or the Merger Date (other than Indebtedness described in clauses (1) and (2) of this Section 4.09(b))[Reserved];
(4) Indebtedness (including Capitalized Lease Obligations), ) and Disqualified Stock and Preferred Stock incurred or issued by the Company or any of its Restricted Subsidiaries, and the issuance of Preferred Stock by any Restricted Subsidiary of the Company, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the purchase of Capital Stock of any Person owning such assets assets, in an aggregate principal amount, together with any amount at the date of such incurrence (including all Refinancing Indebtedness in respect thereof and all incurred to refinance any other Indebtedness, Disqualified Stock and/or Preferred Stock issued and outstanding under Indebtedness incurred pursuant to this clause (4), ) not to exceed 4.0the greater of $100.0 million and 7.5% of Total Assets at any time outstandingConsolidated Net Tangible Assets; so long as provided, however, that such Indebtedness exists at the date of such purchase, lease purchase or improvement transaction or is created within 270 365 days thereafterthereafter (for the avoidance of doubt, the purchase date for any asset shall be the later of the date of completion of installation and the beginning of the full productive use of such asset);
(5) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, death, disability or other employee benefits or property, casualty or liability insurance, or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations (a) are reimbursed within 30 days following such drawing or incurrenceincurrence or (b) are permitted to be incurred (and thereupon shall be deemed to be incurred) pursuant to clause (4) above following the expiry of such 30 day period;
(6) Indebtedness arising from agreements of the Company or its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts price or similar obligations, including earnouts, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that
(A) however, that such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (6) (a)); and
(B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross 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 by the Company and its Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor (other than the Issuer) is expressly shall be subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any the Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if a Subsidiary Guarantor incurs such Indebtedness to a Restricted Subsidiary that is not a Guarantor (other than the Issuer)Subsidiary Guarantor, such Indebtedness is expressly shall be subordinated in right of payment to the Guarantee of the Notes of such Subsidiary Guarantor; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such IndebtednessIndebtedness not permitted by this clause (8);
(9) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another of its Restricted SubsidiariesSubsidiary) shall be deemed in each case to be an issuance of such shares of Preferred StockStock not permitted by this clause (9);
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting interest rate risk with respect to any Indebtedness of the Company or any Restricted Subsidiary permitted to be incurred pursuant to this Section 4.09, exchange rate risk or commodity pricing risk;
(11) obligations in respect of self-insurance and obligations in respect of performance, bid, appeal appeal, stay, surety, customs and surety replevin bonds and performance and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to 200.0% of the net cash proceeds received by the Company since immediately after the Transaction Date from the issue or sale of Equity Interests of the Company or any of its direct or indirect parent companies or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) hereof to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (b) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or, subject to Section 4.09(c) hereof, any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencepreference that, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (12)(b12), does not at any one time outstanding exceed the greater of $900.0 150.0 million (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12) (b) shall cease to be deemed incurred or outstanding for purposes and 10.0% of this clause (12)(b) but shall be deemed incurred for the purposes of Section 4.09(a) hereof from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09 (a) hereof without reliance on this clause (12)(b))Consolidated Net Tangible Assets;
(13) the incurrence or issuance by the Company or any Restricted SubsidiarySubsidiary of Indebtedness or Disqualified Stock, and the issuance by any Restricted Subsidiary of IndebtednessPreferred Stock, in each case that serves to refund, refinance, replace, renew, extend or defease any Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary or Preferred Stock which serves to refund of any Restricted Subsidiary incurred or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred issued as permitted under Section 4.09(a) hereof and clauses or clause (2), (3), ) or (4) and (12)(a) of this Section 4.09(b), ) or this clause (13) and or clause (14) of this Section 4.09(b) or any Indebtedness, Disqualified Stock or Preferred Stock previously incurred or issued to so refund refund, refinance, replace, renew, extend or refinance defease such Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock Stock, including additional Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to pay premiums (including reasonable tender premiums), defeasance costs costs, accrued interest, fees and fees expenses in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(Aa) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which that is not less than the remaining Weighted Average Life to Maturity of, of the Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock being refunded refunded, refinanced, replaced, renewed, extended or refinanced,defeased (or requires no or nominal payments in cash prior to the date that is 91 days after the maturity date of the Notes);
(Bb) to the extent such Refinancing Indebtedness refinances refunds, refinances, replaces, renews, extends or defeases (i) Indebtedness subordinated or pari passu to the Notes or any Guarantee thereofSubordinated Indebtedness, such Refinancing Indebtedness is subordinated or pari passu in right of payment to the Notes or the Guarantee thereof at least to the same extent as the Indebtedness being refinanced refunded, refinanced, replaced, renewed, extended or refunded defeased or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) in the case of any Refinancing Indebtedness in respect of Indebtedness under the Senior Credit Facilities, the Notes, the NXP Notes or the Existing Secured Notes, or Refinancing Indebtedness of any of the foregoing, such Refinancing Indebtedness shall not be required to be incurred substantially contemporaneously with the related refinancing of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable; provided that any portion of the net proceeds of such Refinancing Indebtedness that is not applied to the repayment or prepayment of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, within 45 days following the incurrence of such Refinancing Indebtedness shall not constitute Refinancing Indebtedness in respect of the Senior Credit Facilities, such Notes, NXP Notes or Existing Secured Note, or Refinancing Indebtedness of any of the foregoing, as applicable, and
(Dc) shall not include:
(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company or the IssuerCompany;
(ii) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Company that is not a Guarantor (other than the Issuer) that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor or the IssuerSubsidiary Guarantor; or
(iii) Indebtedness or Disqualified Stock of the Company or Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; and, provided, further, that subclause (a) of this clause (13) will not apply to any refunding, refinancing, replacement, renewal, extension or defeasance of any Secured Indebtedness;
(14) (x) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary incurred or issued to finance an acquisition (or other purchase of assets) or (y) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Company or, subject to Section 4.09 (c) hereof, a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged into or amalgamated into consolidated with the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that in the case of (x) and (y) after giving effect to such acquisition, merger or amalgamation either
consolidation, either (Aa) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test Ratio test set forth in Section 4.09(a) hereof, or
the first sentence of this covenant or (Bb) the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition, merger or amalgamation;
(15) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Credit FacilitiesFacilities pursuant to this Section 4.09, in a principal amount not in excess of the stated amount of such letter of credit;
(17) (Aa) any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this IndentureIndenture and (b) any guarantee by a Restricted Subsidiary of Indebtedness of the Company;
(18) Indebtedness of the Company or any of its Restricted Subsidiaries consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangements, orin each case incurred in the ordinary course of business;
(19) [Reserved];
(20) Indebtedness consisting of cash management services and related activities incurred in the ordinary course of business, including in respect of credit card obligations, overdrafts and related liabilities arising from treasury, depositary and cash management services or in connection with any automated clearinghouse or other electronic transfers of funds;
(21) customer deposits and advance payments received in the ordinary course of business from customers for goods purchased in the ordinary course of business;
(22) Indebtedness under any Permitted Receivables Financing incurred on or after the Original Issue Date;
(23) Indebtedness incurred by the Company or a Restricted Subsidiary in connection with bankers’ acceptances or discounted bills of exchange, in each case incurred or undertaken consistent with past practice or in the ordinary course of business; and
(24) Indebtedness of Foreign Subsidiaries of the Company in an amount not to exceed, at any one time outstanding and together with any other Indebtedness incurred under this clause (24), $75.0 million.
(c) For purposes of determining compliance with this Section 4.09, (1) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (1) through (24) of Section 4.09(b) or is entitled to be incurred pursuant to Section 4.09(a), the Company, in its sole discretion, will classify or reclassify such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) and will only be required to include the amount and type of such Indebtedness, Disqualified Stock or Preferred Stock in one of the above clauses or under the first paragraph of this covenant; and (2) at the time of incurrence, the Company will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in Sections 4.09(a) and (b) above; provided that all Indebtedness outstanding under the Senior Credit Facilities on the Original Issue Date will be treated as incurred under clause (1) of Section 4.09(b).
(d) Notwithstanding anything else in this Section 4.09, Restricted Subsidiaries that are not Subsidiary Guarantors may not incur Indebtedness or issue Disqualified Stock or Preferred Stock pursuant to Section 4.09(a) or clause (12), (13), (14) or (24) of Section 4.09(b) if, after giving pro forma effect to such incurrence or issuance (including a pro forma application of the net proceeds therefrom), the aggregate amount of Indebtedness, Disqualified Stock and Preferred Stock of Restricted Subsidiaries that are not Subsidiary Guarantors incurred or issued pursuant to this Section 4.09 at any one time outstanding would exceed $250.0 million.
(e) Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue
Appears in 1 contract
Sources: Indenture (Vista Outdoor Inc.)