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, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period. (b) The limitations set forth in Section 4.03(a) shall not apply to: (i) the Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the 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) up to an aggregate principal amount outstanding at any one time not to exceed: (1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus (2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00; (ii) the Incurrence by the Company and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof); (a) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]; (a) Indebtedness (including Capitalized Lease Obligations) 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, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence; (v) Indebtedness 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; (vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; (vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness; (viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock; (ix) 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 neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales; (xi) 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 Restricted Subsidiary in the ordinary course of business; (xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(a), (iv), (xiv), (xv), (xix) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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; (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 (y) 91 days following the maturity date of the Securities; (3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof; (xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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; (xvi) 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 Incurrence; (xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit; (xix) Contribution Indebtedness; (xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes; (xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Faci
Appears in 2 contracts
Sources: Indenture (NewPage Holdings Inc.), Indenture (Verso Paper Corp.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company shall UK Holdco will not, and shall will not permit any of its the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall UK Holdco will not permit any of its the Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer UK Holdco and any of the Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary Subsidiaries may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any of the Restricted Subsidiary Subsidiaries may issue shares of Preferred Stock, in each case case, if either (A) the Fixed Charge Interest Coverage Ratio of the Company for the most recently ended four full fiscal quarters Reference Period is at least 2.00 to 1.00 or (B) the Total Net Leverage Ratio for which internal financial statements are available immediately preceding the date most recently ended Reference Period does not exceed 6.50 to 1.00 (any such debt incurred pursuant to this proviso, “Ratio Debt”), in each case determined on which such additional a Pro Forma Basis; provided, further, however, that the aggregate principal amount of Indebtedness is (excluding Acquired Indebtedness not Incurred in connection with or such in contemplation of the applicable merger, acquisition or other similar transaction) that may be Incurred and Disqualified Stock or Preferred Stock is that may be issued would have been at least 2.00 pursuant to 1.00 determined on a pro forma basis (including a pro forma application this clause (a) by Restricted Subsidiaries that are not Borrowers or Guarantors, taken together with the principal amount of the net proceeds therefrom), as if the additional all such Indebtedness had been Incurred, or the Incurred and Disqualified Stock or Preferred Stock had been issued, as issued by Restricted Subsidiaries that are not Borrowers or Guarantors outstanding pursuant to paragraph (1) of the case may be, final proviso to clause (b)(vi) and the application final proviso to clause (b)(xxii)(x) of proceeds therefrom had occurred this Section 7.2, shall not exceed the greater of $432,000,000 and 39% of Consolidated EBITDA as of the most recently ended Reference Period at the beginning of such four-quarter periodany one time outstanding.
(b) The limitations set forth in Section 4.03(a7.2(a) shall not apply to:to (collectively, “Permitted Debt”):
(i) the Incurrence by the Company Indebtedness Incurred pursuant to this Agreement, any other Loan Document or its Restricted Subsidiaries of any Loan Note Instrument (including any Indebtedness under the Credit Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed incurred pursuant to have a principal amount equal to the face amount thereof) up to an aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such thatSection 2.25, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom2.26 or 2.28), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company Borrowers and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Senior Secured Notes issued on the Existing First-Lien Issue Date Closing Date, the 2028 Senior Secured Notes issued on the date of the 2028 Senior Secured Notes Indenture and the 2029 Senior Unsecured Notes issued on the date of the 2029 Senior Unsecured Notes Indenture (in each case, not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Datenotes) and the guarantees thereofguarantees, as applicable (including the exchange securities and related guarantees thereof)applicable;
(aiii) Indebtedness existing on the Existing First-Lien Issue Closing Date (after giving effect to or the Transactions) Amendment No. 6 Effective Date (other than Indebtedness described in Section 7.2(b)(i) and (ii)) (in the case of any individual item of Indebtedness in a principal amount in excess of $25,000,000, to be set forth on Schedule 7.2);
(iv) Permitted First Priority Refinancing Debt and Permitted Second Priority Refinancing Debt;
(v) Permitted Unsecured Refinancing Debt;
(vi) Indebtedness, Disqualified Stock or Preferred Stock (“Incremental Equivalent Debt”) not to exceed an amount equal to the sum of (x) an unlimited amount at any time so long as (A) in the case of Indebtedness that is secured by a Lien on the Collateral on a pari passu basis with the Obligations, the First Lien Net Leverage Ratio for the most recently ended Reference Period does not exceed 5.00 to 1.00, (B) in the case of Indebtedness that is secured by a Lien on the Collateral other than on a pari passu basis with the Obligations, the Secured Net Leverage Ratio for the most recently ended Reference Period does not exceed 6.50 to 1.00 or (C) in the case of Indebtedness that is unsecured or is secured by a Lien on assets that do not constitute Collateral, and in the case of Disqualified Stock or Preferred Stock, either (1) the Total Net Leverage Ratio for the most recently ended Reference Period does not exceed 6.50 to 1.00 or (2) the Interest Coverage Ratio for the most recently ended Reference Period is at least 2.00 to 1.00, in each case on a Pro Forma Basis (but without giving effect to the cash proceeds of any such Indebtedness remaining on the balance sheet and calculated assuming that any such Indebtedness is fully drawn throughout such period), plus (y) the amount of all prior voluntary prepayments, loan buybacks (with credit given to the principal amount thereof) and commitment reductions of Term Loans, Revolving Loans, Incremental Loans, Indebtedness incurred pursuant to this Section 7.2(b)(vi) that is secured by a Lien on the Collateral on a pari passu basis with the Obligations and Permitted Credit Agreement Refinancing Debt and Refinancing Indebtedness previously applied to the permanent repayment of any of the foregoing and the amount of any prepayments made to any Lender pursuant to Section 2.23, with any replacement of a Lender pursuant thereto being deemed, solely for this purpose, to constitute a prepayment (in each case, to the extent not funded with the proceeds of long-term Indebtedness (except Indebtedness under one or more revolving credit or similar facilities) or the proceeds of Permitted Cure Securities applied pursuant to Section 9.4 and, with respect to any prepayment or commitment reduction of or in respect of revolving loans, to the extent accompanied by a permanent reduction in such revolving commitments) (minus the aggregate principal amount of Indebtedness Incurred under Section 2.25(a)(i)(y)), plus (z) an amount equal to the greater of $1,108,900,000 and 100% of Consolidated EBITDA on a Pro Forma Basis as of the most recently ended Reference Period (and after giving effect to any acquisition or other transaction consummated concurrently therewith) (minus the aggregate outstanding principal amount of Indebtedness Incurred under Section 2.25(a)(i)(z)) (provided that, for the avoidance of doubt, the amount available to the Borrowers pursuant to clauses (iy) and (iiz) above shall be available at all times and shall not be subject to any ratio test described in foregoing clause (x) above), which amount may be secured on a pari passu or junior basis; provided, that:
(1) the principal amount of such Indebtedness (excluding Acquired Indebtedness not Incurred in connection with or in contemplation of the applicable merger, acquisition or other similar transaction) that may be Incurred and Disqualified Stock or Preferred Stock that may be issued pursuant to this clause (vi) by Restricted Subsidiaries that are not Borrowers or Guarantors, shall not exceed the greater of $432,000,000 and 39% of Consolidated EBITDA as of the most recently ended Reference Period at any one time outstanding (minus the outstanding principal amount of such Indebtedness Incurred by Restricted Subsidiaries that are not Borrowers or Guarantors pursuant to the second proviso to clause (a) and the final proviso to clause (b)(xxii)(x) of this Section 4.03(b7.2);
(2) the Applicable Requirements shall have been satisfied;
(3) no Indebtedness under this clause (vi) may be Incurred at any time that an Event of Default has occurred and is continuing (bunless such Indebtedness is used to finance, in whole or in part, a Limited Condition Transaction, in which case the absence of an Event of Default shall be tested on the date specified in Section 1.4);
(4) any such Indebtedness in the form of Dollar denominated broadly syndicated term “B” loans Incurred under this clause (vi) that is secured by a Lien on the Collateral on a pari passu basis with the Obligations shall be subject to the MFN Provision set forth in Section 2.25(a)(vii) (giving effect to all exceptions thereto, mutatis mutandis for Incremental Equivalent Debt);
(5) [reserved];; and
(a6) (A) for the avoidance of doubt, if the applicable Borrower incurs Indebtedness under clause (x) above on the same date that it incurs Indebtedness under clauses (y) or (z) above, then the applicable incurrence ratio will be calculated with respect to such incurrence under clause (x) without regard to any incurrence of Indebtedness under clauses (y) or (z) and (B) unless the applicable Borrower elects otherwise, any Indebtedness incurred pursuant to this clause (vi) shall be deemed incurred first under clause (x) above, with the balance incurred under clauses (y) and (z) above.
(vii) Indebtedness (including including, without limitation, Capitalized Lease Obligations, mortgage financings or purchase money obligations) Incurred by the Company UK Holdco or any of its the Restricted Subsidiaries, Disqualified Stock issued by the Company UK Holdco or any of its the Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries to finance all or any part of the Company to finance (whether prior to or within 270 days after) the acquisition, purchase, lease, construction construction, design, installation, repair, replacement or improvement of property (real or personal) ), plant or equipment or other fixed or capital assets used or useful in the business of UK Holdco or the Restricted Subsidiaries or 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 amount whichamount, when aggregated with the principal amount of including all other IndebtednessIndebtedness Incurred to renew, Disqualified Stock and Preferred Stock then outstanding that was refund, Refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clause (iv(vii), does not to exceed the greater of $75.0 million 521,000,000 and 5.047% of Total Assets Consolidated EBITDA as of the most recently ended Reference Period at any one time outstanding (minus amounts incurred and outstanding under clause (xvi) in respect of Indebtedness originally incurred under this clause (vii)); provided, that Capitalized Lease Obligations incurred by UK Holdco or any Restricted Subsidiary pursuant to this clause (vii) in connection with a Sale Leaseback Transaction shall not be subject to the time foregoing limitation so long as the proceeds of Incurrencesuch Sale Leaseback Transaction are used by UK Holdco or such Restricted Subsidiary to permanently repay outstanding loans under any credit agreement, debt facility or other Indebtedness secured by a Lien on the assets subject to such Sale Leaseback Transaction;
(vviii) Indebtedness Incurred by (x) in respect of any bankers’ acceptance, bank guarantees, discounted bill of exchange or the Company discounting or any factoring of its Restricted Subsidiaries receivables, warehouse receipt or similar facilities, and reinvestment obligations related thereto, entered into in the ordinary course of business and (y) 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, however, that upon the drawing of such letters of credit or the Incurrence of such Indebtedness, such obligations are reimbursed within 45 days following such drawing;
(viix) Indebtedness arising from agreements of the Company UK Holdco or a Restricted Subsidiary providing for indemnification, adjustment of purchase price price, earnout or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company UK Holdco in accordance with the terms of this IndentureAgreement, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viiix) shares of Preferred Stock of a Restricted Subsidiary issued to the Company UK Holdco 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 UK Holdco or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ixxi) Indebtedness or Disqualified Stock of (a) a Restricted Subsidiary to the Company UK Holdco or another (b) UK Holdco or any Restricted Subsidiary to any Restricted Subsidiary; provided that if Finance Co. UK Holdco or a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor Borrower or a Guarantor, such Indebtedness is, on and from the date that is 120 days following the Closing Date (or such later date as the Administrative Agent may agree in its reasonable discretion), subordinated in right of payment to the Securities (in the case of Finance Co.) Loans or the Note Guarantee of such Guarantor, as applicablethe case may be; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary holding lending such Indebtedness or Disqualified Stock, as applicable, ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness or Disqualified Stock, as applicable (except to the Company UK Holdco or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such IndebtednessIndebtedness or Disqualified Stock, as applicable;
(xxii) Hedging Obligations that are Incurred in the ordinary course of business (and not Incurred for speculative purposes andpurposes) or in connection with the Transactions: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture Agreement to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchangesrisk; and/or or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or salespurchases;
(xixiii) 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 UK Holdco or any Restricted Subsidiary in the ordinary course of businessSubsidiaries;
(xiixiv) Indebtedness or Indebtedness, Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference that, 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(xiv), does not exceed the greater of $100.0 million 854,000,000 and 77% of Consolidated EBITDA as of the most recently ended Reference Period at any one time outstanding (it being understood that any minus amounts incurred and outstanding under clause (xvi) in respect of Indebtedness Incurred originally 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(xiv));
(xiiixv) any guarantee (by UK Holdco or co-issuance in any of the case of Finance Co.) by an Issuer or a Guarantor Restricted Subsidiaries of Indebtedness or other obligations of the Company UK Holdco or any of its the Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred or other obligations by such Issuer UK Holdco or such Restricted Subsidiary is permitted under the terms of this IndentureAgreement; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Securities Loans or the Note Guarantee of such Restricted Subsidiary, as applicableany Guarantor, 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 Guarantee with respect to Loans and the Securities, as applicableGuarantees, substantially to the same extent as such Indebtedness is subordinated to the Securities Loans or the Note Guarantee of such Restricted Subsidiaryany relevant Guarantees, as applicable;
(xivxvi) the Incurrence by the Company UK Holdco or any of its the Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company which that serves to refund, refinance Refinance, replace or defease any Indebtedness Incurred or Indebtedness, Disqualified Stock or Preferred Stock issued Incurred as permitted under Section 4.03(a) and clauses (ii), (iii)(a), (iv), (xiv), (xv), (xix) and/or (xxclause (a) of this Section 4.03(b7.2 and clauses (b)(i), (b)(ii), (b)(iii), (b)(vi), (b)(vii), (b)(xiv), (b)(xvi), (b)(xix), (b)(xxii), (b)(xxvii) and (b)(xxx), of this Section 7.2 or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance Refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums accrued and unpaid interest, fees and expenses, including any premium and defeasance costs in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(1) other than with respect to Indebtedness incurred pursuant to Section 7.2(a), revolving Indebtedness and Customary Bridge Financings and other than with respect to Indebtedness incurred pursuant to the Inside Maturity Basket, 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 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;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving FaciWeighte
Appears in 2 contracts
Sources: Credit Agreement (Clarivate PLC), Credit Agreement (Clarivate PLC)
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, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its the Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer the Company and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company or its the Restricted Subsidiaries of Indebtedness under the 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) up to an aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) an aggregate principal amount of $200.0 1,500.0 million and (2) an aggregate principal amount of Secured Indebtedness (with all Indebtedness Incurred under this clause (a) being deemed Secured Indebtedness for purposes of making the Borrowing Base; plus
(2determination hereunder) outstanding at any one time that does not cause the greater Secured Indebtedness Leverage Ratio of (x) $50.0 million and (y) an amount such thatthe Company to exceed 3.50 to 1.00, determined on a pro forma basis after giving effect to the incurrence of such Indebtedness (and including a pro forma application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company and the Guarantors of Indebtedness represented by (1) the Original Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofGuarantees, as applicable (including the exchange securities Exchange Securities and guarantees thereof) and (2) the Other Notes issued on the Issue Date under the indentures governing the Other Notes and the related guarantees thereof (including the Other Notes Exchange Securities and guarantees thereof);
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(iv) (a) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company or any of its the Restricted Subsidiaries, Disqualified Stock issued by the Company or any of its the 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, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount whichthat, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 150.0 million and 5.04.5% of Total Assets at the time of Incurrence;
(v) Indebtedness 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 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;
(vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; 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 of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) 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 neither Finance Co. nor not a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee of such Guarantor, as applicable; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which 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 that are not Incurred for speculative purposes andand are either: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed the greater of $100.0 75.0 million and 2.25% of Total Assets at any one the time outstanding 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 (or co-issuance in x) the case of Finance Co.) by an Issuer Company or a Guarantor of Indebtedness or other obligations of the Company or any of its the Restricted Subsidiaries or (y) a Foreign Subsidiary of Indebtedness or other obligations of another Foreign Subsidiary, in each case so long as the Incurrence of such Indebtedness Incurred by such Issuer 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company or any of its the Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company which 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)(aiii), (iv), (xiv), (xv), (xix) and/or and (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 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”) prior to its respective maturity; 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 last maturity date of any Securities then outstanding were instead due on such date one year following the last maturity date of such Securities (provided that any Refinancing Indebtedness Incurred in reliance on this subclause (1)(y) does not provide for any scheduled principal payments prior to the maturity date of the SecuritiesSecurities in excess of, or prior to, the scheduled principal payments due prior to such maturity for the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased);
(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 last maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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, expenses, costs and fees and expenses Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is neither Finance Co. nor not a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xixxx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xixxx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xixxx) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (32) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;Bank Indebtedness.
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (ax) the Company or any of its the Restricted Subsidiaries, Subsidiaries Incurred to finance an acquisition or (by) Persons that are acquired by the Company or any of its 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 pro forma effect to such acquisition 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 (x) greater than immediately prior to such acquisition, merger or amalgamation and (y) equal to or greater than 1.75 to 1.00;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary consisting and Preferred Stock of (x) any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference not exceeding at any time outstanding 200% of 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 net cash proceeds received by the Company and the Restricted Subsidiaries since immediately after the Issue Date from the issue 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 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 extent permitted under Section 4.04(b)(iv). For purposes of determining compliance with this Section 4.03, in the event that an item, Company or a portion Restricted Subsidiary) or cash contributed to the capital of such item, taken by itself, the Company (in each case other than proceeds of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria sales of more than one of the categories of permitted Indebtedness described in clauses (i) through (xxii) above Equity Interests to, or such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a)contributions received from, the Company shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof of its Subsidiaries), as determined in any manner that complies accordance with clauses (based on circumstances existing at the time of such division, classification or reclassificationB) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Faciand
Appears in 2 contracts
Sources: Indenture (MPM Silicones, LLC), Indenture (MPM Silicones, LLC)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company Holdings shall not, and shall not permit any of its the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company Holdings shall not permit any of its the Restricted Subsidiaries (other than Finance Co. or a Subsidiary Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary Holdings may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock Stock, and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock or issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company Holdings 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company Holdings or its any Restricted Subsidiaries Subsidiary of Indebtedness under the 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) up to an aggregate principal amount outstanding at any one time that does not to exceed:
exceed the greatest of (1) an amount equal to $550.0 million, (2) the greater sum of (1x) $200.0 million and (2y) 35.0% of Adjusted Consolidated Net Tangible Assets at the time of Incurrence and (3) the Borrowing Base; plus
(2) Base at the greater time of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00Incurrence;
(ii) the Incurrence by the Company Issuers and the Subsidiary Guarantors of Indebtedness represented by the Securities Notes and the Subsidiary Guarantees (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount) , as applicable (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not but including any additional Existing First-Lien Exchange Notes issued after the Existing First-Lien Issue Date) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof);
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Holdings or any of its Restricted SubsidiariesSubsidiary, Disqualified Stock issued by the Company Holdings or any of its Restricted Subsidiaries Subsidiary and Preferred Stock issued by any Restricted Subsidiaries of the Company Subsidiary to finance (whether prior to or within 270 days after) the purchaseacquisition, lease, construction construction, repair, replacement or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount whichthat, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and or Preferred Stock then outstanding that was and Incurred pursuant to this clause (iv), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) below, does not exceed the greater of $75.0 million and 5.07.5% of Total Adjusted Consolidated Net Tangible Assets at the time of IncurrenceIncurrence (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);
(v) Indebtedness Incurred by the Company Holdings 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 or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims;
(vi) Indebtedness arising from agreements of the Company Holdings or a any Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Holdings 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 Holdings and its Subsidiaries) any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Subsidiary Guarantor is subordinated in right of payment to the obligations of the Company Issuers under the SecuritiesNotes; 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 Holdings or another Restricted SubsidiarySubsidiary 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 IndebtednessIndebtedness not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company 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 Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred StockStock not permitted by this clause (viii);
(ix) Indebtedness of a Restricted Subsidiary to the Company Holdings or another Restricted Subsidiary; provided that if Finance Co. or a Subsidiary Guarantor Incurs incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not an Issuer or a Subsidiary 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 Holdings and its Subsidiaries), such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Subsidiary Guarantee of such Subsidiary 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 Holdings or another Restricted SubsidiarySubsidiary 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 IndebtednessIndebtedness not permitted by this clause (ix);
(x) Hedging Obligations that are not Incurred for speculative purposes and: but (1A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3C) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or salessales (including, without limitation, any commodity Hedging Obligation that is intended in good faith, at inception of execution, to hedge or manage any of the risks related to existing and/or forecasted Hydrocarbon production (whether or not contracted)) and, in each case, extensions or replacements thereof;
(xi) 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 Holdings or any Restricted Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(xii) Indebtedness or Disqualified Stock of the Company Holdings or any Restricted Subsidiary of the Company and Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference which, 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), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) below, does not exceed the greater of $100.0 50.0 million and 5.0% of Adjusted Consolidated Net Tangible Assets at the time of Incurrence (plus, in the case of any one time outstanding Refinancing Indebtedness, the Additional Refinancing Amount) (it being understood that any Indebtedness Incurred under 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 CompanyHoldings, 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) Indebtedness or Disqualified Stock of Holdings or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference at any time outstanding not greater than 100.0% of the net cash proceeds received by Holdings and its Restricted Subsidiaries since immediately after the Issue Date from the issue or sale of Equity Interests of Holdings or any direct or indirect parent entity of Holdings (which proceeds are contributed to Holdings or its Restricted Subsidiary) or cash contributed to the capital of Holdings (in each case other than proceeds of Disqualified Stock or sales of Equity Interests to, or contributions received from, Holdings or any of its Subsidiaries) 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 4.04(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof);
(xiv) any guarantee (by Holdings or co-issuance in the case of Finance Co.) by an Issuer or a Guarantor any Restricted Subsidiary of Indebtedness or other obligations of the Company Holdings or any of its Restricted Subsidiaries Subsidiary so long as the Incurrence of such Indebtedness Incurred by such Issuer Holdings 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 Securities Notes or the Note Subsidiary Guarantee 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 Notes or such Guarantor’s Note Guarantee with respect to the SecuritiesSubsidiary Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities Notes or the Note Guarantee of such Restricted SubsidiarySubsidiary Guarantee, as applicable and (B) if such guarantee is of Indebtedness of Holdings, such guarantee is Incurred in accordance with, or not in contravention of, Section 4.11, solely to the extent Section 4.11 is applicable;
(xivxv) the Incurrence by the Company Holdings or any of its the Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company which 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)(aiii), (iv), (xivxii), (xiii), (xv), ) and (xix) and/or (xxxvi) of this Section 4.03(b) up to the outstanding principal amount (or, if applicable, the liquidation preference face amount, or the like) or, if greater, committed amount (only to the extent the committed amount could have been Incurred on the date of initial Incurrence) 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 was issued pursuant to Section 4.03(a) or clauses (ii), (iii), (iv), (xii), (xiii), (xv) and (xvi) 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 any additional 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”) prior to its respective maturity; 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 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 or refinanced that were due on or after the date that is one year following the last maturity date of any Securities Notes then outstanding were instead due on such date one year following the last date (provided that this subclause (1) will not apply to any refunding or refinancing of maturity of the Securitiesany Secured Indebtedness);
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities Notes or the Note Guarantee of such Restricted Subsidiarya Subsidiary Guarantee, as applicable, such Refinancing Indebtedness is junior to the Securities Notes or the Note Guarantee of such Restricted SubsidiarySubsidiary Guarantee, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;; and
(4) 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;
(53) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is neither Finance Co. nor not a Subsidiary Guarantor that refinances Indebtedness of an Issuer or a Restricted Subsidiary that is a Guarantor, or (y) Indebtedness of the Company an Issuer 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 (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xvxvi) Indebtedness, Disqualified Stock or Preferred Stock of (aA) the Company Holdings or any of its Restricted Subsidiaries, Subsidiary Incurred to finance an acquisition or (bB) Persons that are acquired by the Company Holdings or any of its Restricted Subsidiaries Subsidiary or merged merged, consolidated or amalgamated with or into the Company Holdings or a any Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, provided that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger, consolidation or amalgamation, either:
(1) the Company Holdings 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 of Holdings would be greater no less than immediately prior to such acquisitionacquisition or merger, consolidation or amalgamation;
(xvixvii) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company Holdings or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xviixviii) 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;
(xviiixix) Indebtedness of the Company Holdings or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit AgreementBank Indebtedness, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Restricted Subsidiaries that are not Subsidiary Guarantors and Indebtedness Incurred for working capital purposes;
(xxi) on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Company or Holdings and any Restricted Subsidiary consisting Subsidiary; provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (x) xx), when aggregated with the financing principal amount of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and
(xxii) all other Indebtedness issued by the Company or a Restricted Subsidiary to current or former officers, directors then outstanding 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 the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(athis clause (xx), the Company shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Facidoes not exceed t
Appears in 2 contracts
Sources: Indenture (Athlon Energy Inc.), Indenture (Athlon Energy Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Affiliated Guarantors and the Company shall not, and shall not permit any of its Restricted Subsidiaries the Company’s Subsidiaries, any Neon Entity or any XBP Entity to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) XBP Parent shall not permit any other XBP Entity and the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. or any Subsidiary that is a Guarantor) to issue any shares of Preferred Stock; provided, however, that any an Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case case, in an aggregate amount not to exceed $25 million, if the Fixed Charge Coverage Ratio of the Company for the most recently ended four full fiscal quarters for which internal financial statements are available have been delivered to the Trustee 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 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 any Subsidiary that is not an Issuer or a Guarantor may not incur Indebtedness or issue shares of Disqualified Stock or Preferred Stock in excess of $0.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company or its Restricted Subsidiaries any Subsidiary of the Indebtedness under represented by (A) the Credit Agreement and Notes (including any PIK Notes, but excluding any Additional Notes), (B) the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a Existing 2026 Notes, in an aggregate principal amount equal not to the face amount thereofexceed $25,000,000 and (C) Permitted Securitization Financings, plus (D) up to an additional aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal of $5 million, so long as the Senior Secured Leverage Ratio for the most recently ended four full fiscal quarters for which financial statements have been delivered to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such thatTrustee, determined on a pro forma basis after giving effect basis, does not exceed 3.75 to 1.00, and the incurrence of such Indebtedness (and application Incurrence by the Affiliated Guarantors of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00Indebtedness represented by clauses (A) and (D) above;
(ii) the Incurrence by Indebtedness of the Company and the Guarantors of Indebtedness represented by the Securities (not including under any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof)Super Senior Facility;
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) and described on Schedule 4.03 hereto (other than Indebtedness described in clauses clause (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(a1) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Company, any Neon Entity or any of its Restricted SubsidiariesSubsidiary, Disqualified Stock issued by the Company or any of its Restricted Subsidiaries Subsidiary and Preferred Stock issued by any Restricted Subsidiaries of the Company Subsidiary to finance (whether prior to or within 270 180 days after) the purchaseacquisition, lease, construction construction, repair, replacement or improvement by such Person of property (real or personal) or equipment (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 amount whichthat, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and or Preferred Stock then outstanding that was and Incurred pursuant to this clause (iviv)(1), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) below, does not exceed $35 million (plus, in the greater case of $75.0 million any Refinancing Indebtedness, the Additional Refinancing Amount); and 5.0% (2) Capitalized Lease Obligations or other obligations or deferrals attributable to capital spending or other funds made available by suppliers in connection with any sale and leaseback arrangements not in violation of Total Assets at the time of Incurrencethis Indenture;
(v) Indebtedness Incurred by the Company, any Subsidiary of the Company or any Affiliated Guarantor owed to (including obligations in respect of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and or bank guarantees issued in or similar instruments for the ordinary course of business, including without limitation letters of credit in respect of benefit of) any Person providing workers’ compensation claimscompensation, health, disability or other employee benefits to employees or former employees or their families or property, casualty or liability insurance to the Company or self-insuranceany of the Company’s Subsidiaries or any Affiliated Guarantor (including any XBP Entity), and letters of credit in connection with the maintenance ofrespectively, or pursuant to reimbursement or indemnification obligations to such Person, in each case, provided in the requirements of, environmental ordinary course of business or other permits or licenses from governmental authorities, or other Indebtedness consistent with respect to reimbursement type obligations regarding workers’ compensation claimsindustry practices;
(vi) Indebtedness arising from agreements of the Company or a Restricted any Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred or assumed in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this IndentureSubsidiary, 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, in each case, to the extent such obligation or transaction is permitted by this Indenture;
(vii) Indebtedness of the Company to a Restricted Subsidiaryany of its Subsidiaries; 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 owed to a Restricted Subsidiary that is neither Finance Co. nor not an Issuer or a Subsidiary that is a Guarantor is subordinated in right of payment to the obligations of the Company Issuers under the SecuritiesNotes; 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 of the Company 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 IndebtednessIndebtedness not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred StockStock not permitted by this clause (viii);
(ix) Indebtedness of a Restricted any Subsidiary to the Company or another Restricted any other Subsidiary; provided that if Finance Co. or a Subsidiary that is a Guarantor Incurs incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not an Issuer or 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 Securities (in the case of Finance Co.) or the Note Guarantee of such Guarantor, as applicableSubsidiary; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary of the Company holding such Indebtedness ceasing to be a Restricted Subsidiary of the Company or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted SubsidiarySubsidiary of the Company 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 IndebtednessIndebtedness not permitted by this clause (ix);
(x) Hedging Obligations by a Person that are not Incurred incurred for speculative purposes and: but (1A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness of such Person that is permitted by the terms of this Indenture to be outstanding; (2B) for the purpose of fixing or hedging currency exchange rate risk of such Person with respect to any currency exchanges; and/or or (3C) for the purpose of fixing or hedging commodity price risk of such Person with respect to any commodity purchases or salessales and, in each case, extensions or replacements thereof;
(xi) obligations (including reimbursement obligations with respect to letters Indebtedness of credit the Affiliated Guarantors, the Company and bank guarantees) the Subsidiaries in respect of performanceperformance bonds, bidbid bonds, appeal and bonds, surety bonds and completion guarantees provided by and similar obligations, in each case, reasonably required in the conduct of their respective business (giving effect to any growth or expansion of such business permitted hereunder), including those incurred to secure health, safety, insurance and environmental obligations of the Affiliated Guarantors, the Company or any Restricted Subsidiary and the Subsidiaries, respectively, as conducted in the ordinary course of businessaccordance with good and prudent business industry practices and otherwise as permitted by this Indenture;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) below, does not exceed $100.0 25 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a) from and after the first date on which the Companyplus, or the Restricted Subsidiary, as in the case may beof any Refinancing Indebtedness, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii)the Additional Refinancing Amount);
(xiii) [reserved];
(xiv) any guarantee (by the Company or co-issuance in the case of Finance Co.) by an Issuer or a Guarantor any Subsidiary of Indebtedness or other obligations of the Company or any of its Restricted Subsidiaries Subsidiary so long as the Incurrence of such Indebtedness Incurred or other obligations by such Issuer 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 Securities Notes or the Note Guarantee of the Company or 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 Notes or such Guarantor’s Note Guarantee with respect to the SecuritiesGuarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities Notes or the Note Guarantee of such Restricted SubsidiaryGuarantee, 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;
(xivxv) the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company which 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 (i)(F), (ii), (iii)(aiii), (iviv)(1), (xivxii), (xiii), (xv), (xix) and/or xvi), (xx) and (xxiii) of this Section 4.03(b) or any in an aggregate amount not to exceed the then-outstanding principal amount (or, if applicable, the liquidation preference face amount of the Indebtedness, Disqualified Stock or Preferred Stock Incurred to being so refund refunded, refinanced or refinance such Indebtednessdefeased), Disqualified Stock or Preferred Stocktogether with any accrued interest and any related fees, including any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay expenses and premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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 or refinanced that were due on or after the date that is one year following the last maturity date of any Securities Notes then outstanding were instead due on such date one year following the last date (provided that this subclause (1) will not apply to any refunding or refinancing of maturity of the Securitiesany Secured Indebtedness constituting First-Priority Obligations);
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior subordinated in right of payment to the Securities Notes or the Note Guarantee of such Restricted Subsidiarya Guarantee, as applicable, such Refinancing Indebtedness is junior subordinated in rights of payment to the Securities Notes or the Note Guarantee of such Restricted SubsidiaryGuarantee, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;
(3) shall not be secured by any Lien on any asset other than the assets that secured such Indebtedness being extended, refinanced or modified or, if applicable, shall be unsecured;
(4) is Incurred in an aggregate amount shall not (or if issued with original issue discount, an aggregate issue pricesecured) that is equal to or less have a Lien priority greater than the aggregate amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the such Indebtedness being extended, refinanced plus premium, fees and expenses Incurred in connection with such refinancing;or modified; and
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is neither Finance Co. nor not an Issuer or a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xvxvi) Indebtedness, Disqualified Stock or Preferred Stock of (aA) the Company or any of its Restricted Subsidiaries, Incurred Subsidiary incurred to finance an acquisition or (bB) Persons that are acquired by the Company or any of its Restricted Subsidiaries Subsidiary or merged merged, consolidated or amalgamated with or into the Company or a Restricted any Subsidiary in accordance with the terms of this Indenture; provided, however, provided that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger, consolidation or amalgamation, either:
(1) the Company would be permitted to Incur 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 of the Company would be greater no less than immediately prior to such acquisition;
acquisition or merger, consolidation or amalgamation; provided further, that the aggregate principal amount of Indebtedness under this clause (xvi) (solely if incurred in contemplation of such acquisition or merger, consolidation or amalgamation), together with any Refinancing Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is respect thereof incurred under clause (xv) hereof, shall not recourse to exceed $10 million (plus, in the Company or case of any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization UndertakingsRefinancing Indebtedness, the Additional Refinancing Amount);
(xvii) [reserved];
(xviii) 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; business (provided that such Indebtedness is extinguished within five Business Days of its Incurrence) or other cash management services in the ordinary course of business;
(xviiixix) Indebtedness of the Company or any Restricted Affiliated Guarantor or Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit AgreementBank Indebtedness, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries any Subsidiary that is not an Issuer or a Guarantor; provided, however, that the aggregate principal amount of Indebtedness Incurred for working capital purposesunder this clause (xx), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), together with Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) hereof, does not exceed $3 million (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);
(xxi) Indebtedness of the Company or any Restricted Affiliated Guarantor or Subsidiary consisting of (xA) the financing of insurance premiums or (yB) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and;
(xxii) Indebtedness of the Company, the Affiliated Guarantors and their respective Subsidiaries in respect of letters of credit, bank guarantees, warehouse receipts or similar instruments issued by to support their respective performance obligations and trade letters of credit (other than obligations in respect of other Indebtedness) in the Company or a Restricted Subsidiary to current or former officersordinary course of business;
(xxiii) Indebtedness, directors and employees thereof or any direct or indirect parent thereofIncurred on behalf of, or their respective estatesrepresenting guarantees of Indebtedness of, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests joint ventures of the Company or and any Subsidiary; provided, however, that the aggregate principal amount of its direct or indirect parent companies Indebtedness Incurred under this clause (xxiii), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xxiii), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) hereof, does not exceed $10 million;
(xxiv) to the extent permitted under Section 4.04(b)(iv). 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 constituting Indebtedness 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 4.03(a)Affiliated Guarantors, the Company shalland the Subsidiaries, in its sole discretionall premium (if any), dividedefeasance costs, classify or reclassifyinterest (including post-petition interest), or later dividefees, classify or reclassifyexpenses, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Facicharges and
Appears in 1 contract
Sources: Indenture (Exela Technologies, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) None of the Issuers or the Guarantors will, incur, create, assume or permit to exist any Indebtedness, except (i) The Company shall notIndebtedness created hereunder and under the other Notes Documents (but excluding any Additional Notes), and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) Indebtedness outstanding under the Company shall Exchange Offer Notes and guarantees thereof, (iii) during the 90 day period preceding the maturity of the PIK Toggle Notes, Indebtedness in the form of Additional Notes issued hereunder or New Additional Notes issued under the New Notes Indenture not permit to exceed an aggregate principal amount (the “Additional Debt Amount”) such that, after giving regard to any original issue discount thereon not in excess of 25%, would result in proceeds to the Issuers equal to the sum of (x) the aggregate principal amount of the PIK Toggle Notes immediately outstanding following the consummation of the Exchange Offer (excluding the Purchased PIK Toggle Notes) plus (y) all accreted interest thereon through the maturity date thereof pursuant to the terms thereof as in effect on the Issue Date plus (z) an amount equal to the Additional Notes Payment, and (iv) with respect to any of its Restricted Subsidiaries the foregoing clauses (other than Finance Co. or a Guarantori) through (iii), any Permitted Refinancing Indebtedness incurred to issue any shares of Preferred StockRefinance such Indebtedness (“Permitted Indebtedness”); provided, however, that any Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of Issuers shall distribute the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the 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) up to an aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof);
(a) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved];
(a) Indebtedness (including Capitalized Lease Obligations) 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, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) 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 neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(a), (iv), (xiv), (xv), (xix) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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 Payment on or promptly after the date one year following the last maturity date of incurrence of any Securities then outstanding were instead due on such date one year following the last date of maturity Indebtedness pursuant to clause (iii) hereof, in cash, as a premium, pro rata among all holders of the Securities;
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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notesexcluding, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
practicable, any Additional Notes) and any New Notes (xv) Indebtednessexcluding, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). For purposes practicable, any New Additional Notes) as of determining compliance with this Section 4.03, in the event that an item, or a portion date 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 4.03(a), the Company shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Faciincurrence.
Appears in 1 contract
Sources: Indenture (J Crew Group 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, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the 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) up to an aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 3.00 to 1.00;
(ii) the Incurrence by the Company and the Guarantors of Indebtedness represented by the Original Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofNote Guarantees, as applicable (including the exchange securities Exchange Securities and related guarantees thereof);
(a) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]Indebtedness under the Existing First-Lien Notes outstanding immediately after the Issue Date until the completion of the Cash Tender Offer and the redemption of the Existing First-Lien Notes;
(iv) (a) Indebtedness (including Capitalized Lease Obligations) 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, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) 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 neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(a), (iv), (xiv), (xv), (xix) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving FaciFacility or ABL F
Appears in 1 contract
Sources: Indenture (Verso Paper 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, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the 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) up to an aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof);
(a) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved];
(a) Indebtedness (including Capitalized Lease Obligations) 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, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided provided, that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided 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 Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided provided, that if Finance Co. or a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 is permitted under the terms of this Indenture; provided provided, that if such Indebtedness is by its express terms subordinated in right of payment to the Securities or the Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(a), (iv), (xiv), (xv), (xix) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 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 the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided provided, that all Indebtedness under the First-Lien Revolving FaciRevolvin
Appears in 1 contract
Sources: Indenture (Verso Paper Holdings LLC)
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, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a4B.03(a) shall not apply to:
(i) the Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the any 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) up to an aggregate principal amount outstanding at any one time not to exceed:
: (1i) an amount equal to the greater of (1) $200.0 325.0 million and (2) the Borrowing Base; plus
plus (2ii) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence Incurrence of such Indebtedness (and the application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 3.25 to 1.00;
(ii) the Incurrence by the Company and the Guarantors of Indebtedness represented by the Securities Notes (not including any Additional SecuritiesNotes, but for the avoidance of doubt, including any PIK Securities issued from time to time and any guarantees thereof) and the Existing First-Lien Note Guarantees (including Exchange Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Dateand related guarantees thereof) and the New Senior Subordinated Notes and the guarantees thereof, as applicable thereof (including the and any exchange securities notes and related guarantees thereof);
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b4B.03(b)) and (b) [reserved]);
(iv) (a) Indebtedness (including Capitalized Lease Obligations) 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, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) 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 neither not Finance Co. nor or a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a4B.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(a4B.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 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 Note Guarantee 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 Guarantee Guaranty with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Guarantee 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 of a Restricted Subsidiary of the Company which serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(a4B.03(a) and or clauses (ii), (iii)(aiii), (iv), (xiv), (xv), (xix) and/or (xx) of this Section 4.03(b4B.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee Guaranty of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities or the Note Guarantee Guaranty 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b4B.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b4B.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b4B.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities Securities, the Second-Old Second Lien Notes, the Existing Floating Rate Second Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations Obligations, and (B) subclause (3) of this clause (xiv) will shall not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (ax) the Company or any of its Restricted Subsidiaries, Subsidiaries Incurred to finance an acquisition or (by) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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(a4B.03(a); or
(2) the Fixed Charge Coverage Ratio would be greater than immediately prior to such acquisition;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv)clause 4 of the definition of Permitted Payments.
(xxiii) Indebtedness in respect of the New Senior Secured Notes in an aggregate amount not to exceed $650.0 million;
(xxiv) Indebtedness in respect of the NewPage Term Loan Facility in an aggregate amount not to exceed $750.0 million; and
(xxv) the Incurrence by the NewPage Entities of Indebtedness under the NewPage 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) up to an aggregate principal amount outstanding at any one time not to exceed the greater of (i) $550.0 million and (ii) the NewPage Borrowing Base. For purposes of determining compliance with this Section 4.034B.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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving FaciDisqua
Appears in 1 contract
Sources: Indenture (Verso Paper Holdings LLC)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company Parent and the Issuers shall not, and shall not permit any of its the other Restricted Subsidiaries to, directly Incur or indirectly, Incur permit to exist any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) Indebtedness (other than as described in Section 4.03(b)(ii) and Section 4.03(b)(xxii) below) existing or committed on the Incurrence by the Company or its Restricted Subsidiaries of Issue Date (provided that any such Indebtedness under the 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) up to an aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect that is owed to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof);
(a) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (Person other than Indebtedness described in clauses (i) Parent and (ii) of this Section 4.03(b)) and (b) [reserved];
(a) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company one or any more of its Restricted Subsidiaries, Disqualified Stock issued by the Company in an aggregate amount in excess of $5.0 million shall be set forth in Part A of Schedule 4.03 and (y) owing to Parent or any one or more of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries in excess of the Company to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement $5.0 million shall be set forth on Part B of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)Schedule 4.03) and (b) Acquired any Permitted Refinancing Indebtedness Incurred to Refinance such Indebtedness; in an aggregate principal amount whichprovided that (1) subject to Schedule 4.33, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then any Indebtedness outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(vi) Indebtedness Incurred which is owed by the Company or a Notes Party to 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;
(vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) 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 neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Notes Party shall be subordinated in right of payment to the Securities or such Guarantor’s Note Guarantee same extent required pursuant to Section 4.03(b)(v) and (2) any Permitted Refinancing Indebtedness at any time Incurred with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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 described in clause (ii), (iii)(a), (iv), (xiv), (xv), (xix) and/or (xxy) of this Section 4.03(b4.03(b)(i) outstanding on the Issue Date (or any Indebtedness, Disqualified Stock an issue of Permitted Refinancing Indebtedness Incurred in respect thereof or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject prior to the following proviso, “Incurrence of such Permitted Refinancing Indebtedness”) prior may only be owed to the Parent or its respective maturity; provided, however, that such Refinancing Indebtedness:
(1) has a Weighted Average Life Restricted Subsidiary to Maturity at which 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 and described in clause (y) the Weighted Average Life to Maturity that would result if all payments of principal above outstanding 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 SecuritiesIssue Date was owed;
(2ii) has a Stated Maturity which is not earlier than the earlier of (xA) the Stated Maturity Indebtedness in respect of the Indebtedness being refunded or refinanced or Term Loans outstanding on the Issue Date, (yB) 91 days following other Permitted Debt secured by Other First Liens on the maturity date First Lien Collateral (provided that the amount of the Securities;
Permitted Debt to be incurred at any time under this clause (3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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;
(5B) shall not include (x) exceed the principal amount of Indebtedness such that, immediately after giving effect to the Incurrence thereof and the use of a Restricted Subsidiary proceeds of the Company that loans thereunder, the First Lien Secured Net Leverage Ratio on a Pro Forma Basis is neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred not greater than 2.25 to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b)1.00; provided, further, that for purposes of this calculation net cash proceeds of Indebtedness incurred under this Section 4.03(b)(ii)(B) incurred at such time shall not be netted against the applicable amount of Consolidated Debt for purposes of such calculation of the First Lien Secured Net Leverage Ratio; provided, further, that any Permitted Debt incurred under this Section 4.03(b)(ii)(B) shall rank equally and ratably in right of security and payment with the Notes (A) subclauses (1including as to waterfall and payment priority relative to any then outstanding First-Out Term Loans), (2) and (3C) Permitted Refinancing Indebtedness in respect of any Indebtedness theretofore outstanding pursuant to this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereofSection 4.03(b)(ii);
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xviiii) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to of the Company Parent or any Restricted Subsidiary other than a Receivables Subsidiary (except pursuant to Hedging Agreements entered into for Standard Securitization Undertakings)non-speculative purposes;
(xviiiv) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Parent or any Restricted Subsidiary, pursuant to reimbursement or indemnification obligations to such Person, in each case in the ordinary course of business or consistent with past practice or industry practices;
(v) Indebtedness of the Parent, the Issuer or the US Co-Issuer to the Parent or any Restricted Subsidiary and of any Restricted Subsidiary to the Parent, the Issuer, the US Co-Issuer or any other Restricted Subsidiary; provided that (i) Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor owing to any Notes Party Incurred pursuant to this Section 4.03(b)(v) shall be subject to Section 4.05 and (ii) subject to Schedule 4.33, Indebtedness owed by any Notes Party to any Restricted Subsidiary that is not a Notes Party Incurred pursuant to this Section 4.03(b)(v) shall be subordinated in right of payment to the First Priority Notes Obligations under this Indenture on subordination terms described in Exhibit E hereto or on other subordination terms reasonably satisfactory to the First Lien Collateral Agent (at the direction of holders of a majority of the Notes) and the Issuers;
(vi) Indebtedness Incurred in respect of performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, in each case provided in the ordinary course of business or consistent with past practice or industry practices, including those Incurred to secure health, safety and environmental obligations in the ordinary course of business or consistent with past practice or industry practices;
(vii) 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 each case Incurred in the ordinary course of business;
(i) Indebtedness of a Restricted Subsidiary acquired after the Issue Date or a Person merged or consolidated with the Parent or any Restricted Subsidiary after the Issue Date and Indebtedness otherwise assumed by the Parent, the Issuer, the US Co-Issuer or any other Notes Party that is a Domestic Subsidiary (and which may be guaranteed by any Notes Party) in connection with the acquisition of assets or Equity Interests (including a Permitted Business Acquisition), where such acquisition, merger or consolidation is not prohibited by this Indenture; provided that, (x) Indebtedness Incurred pursuant to preceding sub-clause (viii)(i) shall be in existence prior to the respective acquisition of assets or Equity Interests (including a Permitted Business Acquisition) and shall not have been created in contemplation thereof or in connection therewith, and (y) after giving effect to the Incurrence of such Indebtedness, (A) in the case of any such Indebtedness that is secured, the Secured Net Leverage Ratio (I) shall not be greater than 3.25 to 1.00 or (II) shall be no more than the Secured Net Leverage Ratio in effect immediately prior thereto and, (B) in the case of any such Indebtedness (whether secured or unsecured), the Fixed Charge Coverage Ratio (I) shall not be less than 2.00 to 1.00 or (II) shall be no less than the Fixed Charge Coverage Ratio in effect immediately prior thereto, each calculated on a Pro Forma Basis for the then most recently ended Test Period; and (ii) any Permitted Refinancing Indebtedness Incurred to Refinance any such Indebtedness;
(ix) (x) Capitalized Lease Obligations, mortgage financings and other Indebtedness Incurred by the Parent or any Restricted Subsidiary prior to or within 360 days after the acquisition, lease, construction, repair, replacement or improvement of the respective property (real or personal, and whether through the direct purchase of property or the Equity Interest of any Person owning such property) permitted under this Indenture in order to finance such acquisition, lease, construction, repair, replacement or improvement, in an aggregate principal amount that immediately after giving effect to the Incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 4.03(b)(ix) and Section 4.03(b)(x), would not exceed $62.5 million and (y) any Permitted Refinancing Indebtedness in respect thereof;
(x) (x) Capitalized Lease Obligations and any other Indebtedness Incurred by the Parent or any Restricted Subsidiary arising from any Sale and Lease-Back Transaction that is permitted under Section 4.15 so long as the principal amount thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 4.03(b)(x) and Section 4.03(b)(ix), would not exceed $62.5 million and (y) any Permitted Refinancing Indebtedness in respect thereof;
(xi) (x) other Indebtedness of the Parent or any Restricted Subsidiary, in an aggregate principal amount that, immediately after giving effect to the Incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 4.03(b)(xi), would not exceed $80.0 million (provided that, if such Indebtedness is of any Restricted Subsidiary that is not a Notes Party, the aggregate principal amount of such Indebtedness, immediately after giving effect to the Incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness of Restricted Subsidiaries other than Notes Parties outstanding pursuant to this Section 4.03(b)(xi), does not exceed $30.0 million) and (y) any Permitted Refinancing Indebtedness in respect thereof;
(xii) [reserved];
(xiii) Guarantees (i) by the Parent, the Issuer, the US Co-Issuer or any Subsidiary Guarantor of any Indebtedness of the Parent, the Issuer, the US Co-Issuer or any Subsidiary Guarantor permitted to be Incurred under this Indenture; provided that any Guarantees of Indebtedness of the Parent, the Issuer, the US Co-Issuer or any Subsidiary Guarantor that is owed to any Restricted Subsidiary that is not a Subsidiary Guarantor shall be subordinated in right of payment to the First Priority Notes Obligations to the same extent required pursuant to Section 4.03(b)(v), (ii) by the Parent, the Issuer, the US Co-Issuer or any Subsidiary Guarantor of Indebtedness otherwise permitted hereunder of any Restricted Subsidiary that is not a Subsidiary Guarantor to the extent such Guarantees are permitted by Section 4.05 (other than Section 4.05(r)), (iii) by any Restricted Subsidiary that is not a Subsidiary Guarantor of Indebtedness of another Restricted Subsidiary that is not a Subsidiary Guarantor, and (iv) [reserved]; provided that Guarantees (x) by the Parent, the Issuer, the US Co-Issuer or any Subsidiary Guarantor under this Section 4.03(b)(xiii) of any other Indebtedness of a Person that is subordinated in right of payment to other Indebtedness of such Person shall be expressly subordinated in right of payment to the First Priority Notes Obligations to at least the same extent as such underlying Indebtedness is subordinated in right of payment and (y) otherwise permitted by this Section 4.03(b)(xiii) shall not be permitted with respect to any Indebtedness (including, without limitation, Permitted Debt and Permitted Refinancing Indebtedness) where the guarantor providing the Guarantee is not permitted to guarantee such Indebtedness because this Section 4.03 (or defined terms used in this Section 4.03) otherwise limits the Persons who may guarantee such Indebtedness (where such Indebtedness is extinguished within five being Refinanced or otherwise);
(xiv) Indebtedness arising from agreements of the Parent or any Restricted Subsidiary providing for indemnification, adjustment of purchase or acquisition price or similar obligations (including earn-outs), in each case, Incurred or assumed in connection with the Transactions, any Permitted Business Days Acquisition, other Investments or the disposition of its Incurrenceany business, assets or a Restricted Subsidiary not prohibited by this Indenture;
(xv) Indebtedness in respect of letters of credit, bank guarantees, warehouse receipts or similar instruments issued in the ordinary course of business or consistent with past practice or industry practices and not supporting obligations in respect of Indebtedness for borrowed money;
(xvi) (i) Permitted Debt (that is either unsecured or secured by Junior Liens on the First Lien Collateral) so long as immediately after giving effect to the Incurrence of such Permitted Debt and the use of proceeds thereof, (A) the Fixed Charge Coverage Ratio on a Pro Forma Basis is not less than 2.00 to 1.00 and (B) no Default or Event of Default shall have occurred and be continuing or shall result therefrom, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(xvii) (x) Indebtedness of Restricted Subsidiaries that are not Subsidiary Guarantors in an aggregate principal amount outstanding that, immediately after giving effect to the Incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 4.03(b)(xvii), would not exceed $50.0 million and (y) any Permitted Refinancing Indebtedness in respect thereof;
(xviii) Indebtedness Incurred in the ordinary course of business in respect of obligations of the Company Parent or any Restricted Subsidiary supported to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are Incurred in connection with open accounts extended by a letter suppliers on customary trade terms in the ordinary course of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount business and not in excess connection with the borrowing of the stated amount of such letter of creditmoney or any Hedging Agreements;
(xix) Contribution IndebtednessIndebtedness representing deferred compensation to employees, consultants or independent contractors of the Parent or any Restricted Subsidiary Incurred in the ordinary course of business;
(xx) (x) Indebtedness in connection with Qualified Receivables Facilities in an aggregate principal amount outstanding that, immediately after giving effect to the Incurrence of Foreign Subsidiaries Incurred for working capital purposessuch Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 4.03(b)(xx), would not exceed $200.0 million and (y) any Permitted Refinancing Indebtedness in respect thereof;
(xxi) obligations in respect of agreements regarding cash management services;
(xxii) Indebtedness represented by the Notes issued on the Issue Date and the Guarantees and any Permitted Refinancing Indebtedness in respect of such Notes and Guarantees;
(xxiii) Indebtedness of, Incurred on behalf of, or representing Guarantees of Indebtedness of, joint ventures subject to compliance with Section 4.05 (other than Section 4.05(r));
(xxiv) Indebtedness issued by the Company Parent or any Restricted Subsidiary to current or former officers, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of the Parent permitted by Section 4.04;
(xxv) Indebtedness consisting of obligations of the Parent or any Restricted Subsidiary under deferred compensation or other similar arrangements Incurred by such Person in connection with the Transactions and Permitted Business Acquisitions or any other Investment permitted hereunder;
(xxvi) Indebtedness of the Parent or any Restricted Subsidiary to or on behalf of any joint venture (regardless of the form of legal entity) that is not a Restricted 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 Parent and the Restricted Subsidiaries; and
(xxvii) Indebtedness consisting of (xi) the financing of insurance premiums or (yii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and.
(xxiic) 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). For purposes of determining compliance with this Section 4.034.03 or Section 4.13:
(1) the amount of any Indebtedness denominated in any currency other than U.S. dollars shall be calculated based on customary currency exchange rates in effect, in the event that an item, or a portion case of such itemIndebtedness incurred (in respect of term Indebtedness) or committed (in respect of revolving Indebtedness) on or prior to the Issue Date, taken by itself, of Indebtedness, Disqualified Stock or Preferred Stock meets on 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 4.03(a), the Company shallIssue Date and, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time case of such divisionIndebtedness incurred (in respect of term Indebtedness) or committed (in respect of revolving Indebtedness) after the Issue Date, classification on the date on which such Indebtedness was incurred (in respect of term Indebtedness) or reclassification) with this Section 4.03committed (in respect of revolving Indebtedness); provided that all if such Indebtedness under is incurred to refinance other Indebtedness denominated in a currency other than U.S. dollars (or in a different currency from the FirstIndebtedness being refinanced), and such refinancing would cause the applicable U.S. dollar-Lien Revolving Facidenominated restriction to be exceeded if calculated at the relevant currency exchange rate in ef
Appears in 1 contract
Sources: Indenture (Mallinckrodt PLC)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company Borrower shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a GuarantorSubsidiary Loan Party) to issue any shares of Preferred Stock; provided, however, that any Issuer the Borrower and any Restricted Subsidiary that is a Guarantor Subsidiary Loan Party or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company Borrower 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a6.01(a) shall not apply to:
(i) the Incurrence by the Company Borrower or its Restricted Subsidiaries of Indebtedness under the Credit Agreement 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) up to in the aggregate principal amount of $1,600.0 million plus an aggregate principal amount outstanding at any one time that does not cause the Secured Indebtedness Leverage Ratio of the Borrower to exceed:
(1) an amount equal exceed 4.00 to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that1.00, determined on a pro forma basis after giving effect to the incurrence of such Indebtedness (and including a pro forma application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company Borrower and the Guarantors Loan Parties of Indebtedness represented by the Securities (not A) Loans and the Guarantees, the Exchange Notes and related guarantees to be issued in exchange for the Loans and the Guarantees and the exchange notes and related exchange guarantees to be issued in exchange for the Exchange Notes and the guarantees thereof pursuant to the Registration Rights Agreement and (B) any Permanent Financing (including any Additional Securitiesguarantee thereof) and the Existing First-Lien Notes any exchange notes and related exchange guarantees to be issued on the Existing First-Lien Issue Date (not including in exchange for any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) Permanent Financing and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof);
(aiii) Indebtedness existing on the Existing First-Lien Issue Closing Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b6.01(b)) and (b) [reserved]);
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Borrower or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company Borrower or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company Borrower to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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 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;
(vi) Indebtedness arising from agreements of the Company Borrower or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Company Borrower in accordance with the terms of this IndentureAgreement, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Borrower to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor Subsidiary Loan Party is subordinated in right of payment to the obligations of the Company Borrower under the SecuritiesLoans; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company 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 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 Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company Borrower or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs Subsidiary Loan Party incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor Subsidiary Loan Party, such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee of such Guarantor, as applicableSubsidiary Loan Party; 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 Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are not Incurred incurred for speculative purposes andand either: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture Agreement to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk (including resin price risk) with respect to any commodity purchases or sales;
(xi) 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 Borrower or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company Borrower or any Restricted Subsidiary of the Company Borrower and Preferred Stock of any Restricted Subsidiary of the Company Borrower not otherwise permitted hereunder in an aggregate principal amountamount which, 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 $100.0 million and 4.5% of Total Assets at any one the time outstanding 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(a6.01(a) from and after the first date on which the CompanyBorrower, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a6.01(a) without reliance upon this clause (xii));
(xiii) any guarantee (or co-issuance in by the case of Finance Co.) by an Issuer Borrower or a Guarantor Subsidiary Loan Party of Indebtedness or other obligations of the Company Borrower or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by such Issuer the Borrower or such Restricted Subsidiary is permitted under the terms of this IndentureAgreement; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Securities Loans or the Note Guarantee of such Restricted Subsidiary, as applicable, any such guarantee (or co-issuance in the case of Finance Co.) of such Issuer or such Guarantor Subsidiary Loan Party’s with respect to such Indebtedness shall be subordinated in right of payment to the Securities or such GuarantorSubsidiary Loan Party’s Note Guarantee with respect to the Securities, as applicable, Loans substantially to the same extent as such Indebtedness is subordinated to the Securities Loans or the Note Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company Borrower or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company Borrower which serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(a6.01(a) and clauses (ii), (iii)(aiii), (iv), (xiv), (xv), (xix) and/or and (xx) of this Section 4.03(b6.01(b) or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(1A) 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 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 Securitiesrefinanced;
(2B) 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 SecuritiesRollover Loan Maturity Date;
(3C) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities Loans or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities Loans 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;
(4D) 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;
(5E) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company Borrower that is neither Finance Co. nor not a Guarantor Subsidiary Loan Party that refinances Indebtedness of an Issuer the Borrower or a Restricted Subsidiary that is a GuarantorSubsidiary Loan Party, or (y) Indebtedness of the Company Borrower or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(6F) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (iv) or (xixxx) of this Section 4.03(b6.01(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xixxx) of this Section 4.03(b6.01(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or and (xix) of this Section 4.03(b6.01(b); provided, further, that (A) subclauses (1), (2) and (32) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-First Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereofObligations;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (ax) the Company Borrower or any of its Restricted Subsidiaries, Incurred Subsidiaries incurred to finance an acquisition or (by) Persons that are acquired by the Company Borrower or any of its Restricted Subsidiaries or merged with or amalgamated into the Company Borrower or a any of its Restricted Subsidiary Subsidiaries in accordance with the terms of this IndentureAgreement; provided, however, that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger either:
(1A) the Company Borrower would be permitted to Incur 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(a6.01(a); or
(2B) the Fixed Charge Coverage Ratio of the Borrower would be greater than immediately prior to such acquisitionacquisition or merger;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company Borrower 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 Incurrence;
(xviii) Indebtedness of the Company Borrower or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit AgreementAgreements, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Subsidiaries, provided, however, that the aggregate principal amount of Indebtedness Incurred for working capital purposesunder 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 $25.0 million at any one time outstanding;
(xxi) Indebtedness of the Company Borrower 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 issued by incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Company Borrower or a any Restricted Subsidiary to current or former officersnot in excess, directors and employees thereof or at any direct or indirect parent thereofone time outstanding, or their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv)$7.5 million. For purposes of determining compliance with this Section 4.036.01, in the event that an item, or a portion of such item, taken by itself, 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 such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a6.01(a), the Company Borrower shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.036.01. 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 6.01. 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 all the Incurrence of the Indebtedness under represented by such guarantee or letter of credit, as the Firstcase may be, was in compliance with this Section 6.01. For purposes of determining compliance with any U.S. dollar-Lien Revolving Facidenominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign curren
Appears in 1 contract
Sources: Senior Secured Bridge Loan Credit Agreement (Packerware Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company Issuer shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Consolidated Leverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 Issuer does not exceed 3.5 to 1.00 1.0 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock 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 period for which the EBITDA component of the Consolidated Leverage Ratio calculation is being measured.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company Issuer or its any Restricted Subsidiaries Subsidiary of Indebtedness under the a 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) up to an in the aggregate principal amount outstanding at any one time time, taken together with any Indebtedness outstanding pursuant to clause (xvi), not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of exceed (x) $50.0 million and 10,000,000, minus (y) an any principal amount such that, on a pro forma basis after giving effect of Indebtedness permanently repaid pursuant to the incurrence of such Indebtedness (and application of the net proceeds therefromSection 4.06(b)(i)(A), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by any of the Company Issuer and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof)Guarantees;
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) ), including the Convertible Notes and any Guarantor’s guarantee thereof (b) [reserved]whether or not such guarantee existed on the Issue Date);
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Issuer or any of its Restricted SubsidiariesSubsidiary, and Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company Subsidiary, to finance (whether prior to or within 270 days after) the purchaseacquisition, lease, construction construction, repair, replacement or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount whichthat, when aggregated with the principal amount of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence10,000,000;
(v) Indebtedness 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 authoritiesGovernmental Authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims;
(vi) Indebtedness arising from agreements of the Company Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligationsobligations (including earn-out obligations and other contingent consideration), in each case, Incurred or assumed in connection with the Transactions or any acquisition or disposition of any business, any assets or a Subsidiary of the Company Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person (other than the Issuer or a Restricted Subsidiary) acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor is subordinated in right of payment to the obligations of the Company Issuer under the Securities; 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) shall be deemed, in each case, to be an Incurrence of such IndebtednessIndebtedness not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another Restricted Subsidiarya Guarantor; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary Guarantor that holds such shares of Preferred Stock of another a Restricted Subsidiary ceasing to be a Restricted Subsidiary Guarantor or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another Restricted Subsidiarya Guarantor) shall be deemed, in each case, to be an issuance of shares of Preferred StockStock not permitted by this clause (viii);
(ix) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted SubsidiarySubsidiary of the Issuer; provided provided, that if Finance Co. or any such Indebtedness owed by a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of the Securities (in the case of Finance Co.) or the Note Guarantee of such Guarantor, as applicable; provided, provided further, that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary of the Issuer holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary of the Issuer 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 (ix);
(x) Hedging Obligations of the Issuer or any Guarantor that are not Incurred incurred for speculative purposes andbut: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales;
(xi) obligations (including reimbursement obligations with obligations) in respect to of letters of credit and bank guarantees) in respect of , performance, bid, appeal and surety bonds, completion guarantees, workers’ compensation claims, self-insurance obligations, bankers’ acceptances, export or import, indemnities, customs, revenue bonds and completion guarantees provided by or similar instruments of the Company Issuer or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company Issuer or any Restricted Subsidiary of the Company and Preferred Stock of any Restricted Subsidiary of the Company Guarantor not otherwise permitted hereunder under this Indenture in an aggregate principal amountamount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million 10,000,000 at any one time outstanding (it being understood that any Indebtedness Incurred under 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 CompanyIssuer, or the Restricted SubsidiaryGuarantor, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii));
(xiii) any guarantee (or co-issuance in by the case of Finance Co.) by an Issuer or a Guarantor Restricted Subsidiary of Indebtedness or other obligations of the Company Issuer or any of its other Restricted Subsidiaries Subsidiary so long as the Incurrence of such Indebtedness Incurred by such the Issuer or such other 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 Note Guarantee of such Restricted Subsidiaryany Guarantor, 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 Guarantee with respect to the Securities, as applicable, Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Guarantee of such Restricted SubsidiaryGuarantor, as applicable;
(xiv) the Incurrence by the Company Issuer or any of its Restricted Subsidiaries Guarantor of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company which Guarantor 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)(aiii), (iv), (xii), (xiv), (xv), (xix) and/or and (xxxxi) of this Section 4.03(b) or any Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock, including any Indebtedness, additional Indebtedness or Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums and fees paid-in-kind interest), fees, expenses and defeasance costs in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, provided that such Refinancing Indebtedness:
(1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which that is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Indebtedness or Disqualified Stock being refunded, refinanced 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 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 Securitiesdefeased;
(2) has a Stated Maturity which that is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or and (y) 91 days following the maturity date Stated Maturity of the Securities;
(3) to the extent such Refinancing Indebtedness refunds, refinances or defeases (a) Indebtedness junior in right of payment to the Securities or the Note Guarantee of such Restricted Subsidiarya Guarantee, as applicable, such Refinancing Indebtedness is junior in right of payment to the Securities or a Guarantee to the Note Guarantee of same extent as such Restricted SubsidiaryIndebtedness being refunded, refinanced or defeased, 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 refunded, refinanced or defeased plus premiumpremium (including tender premium and paid-in-kind interest), fees fees, expenses and expenses defeasance costs Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is neither Finance Co. nor Issuer or a Guarantor that refunds, refinances Indebtedness of an Issuer or a Restricted Subsidiary that is a Guarantor, or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances defeases Indebtedness of an Unrestricted Subsidiary; and
(6) in the case of any Refinancing Indebtedness Incurred to refund, refinance or defease Indebtedness outstanding under clause (iv), (xii), (xix) or (xixxxi) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv), (xii), (xix) or (xixxxi) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses clause (iv), (xii), (xix) or (xixxxi) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of (ax) the Company Issuer or any of its Restricted Subsidiaries, Incurred Subsidiary incurred to finance an acquisition of any property or assets or (by) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiaries Subsidiary or merged merged, consolidated or amalgamated with or into the Company Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; providedprovided that, howeverin each case, that immediately after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger, consolidation or amalgamation either:
(1) the Company Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Consolidated Leverage Ratio test set forth in the first sentence of Section 4.03(a); or
(2) the Fixed Charge Coverage Consolidated Leverage Ratio would be greater less than immediately prior to such acquisition or merger, consolidation or amalgamation; provided, further, that if, with respect to any Indebtedness incurred under this clause (xv), either (A) the property or assets so acquired are held in a Restricted Subsidiary that is not a Guarantor or (B) the Person so acquired does not become, upon acquisition, a Guarantor, then, in each case, the Issuer and the Guarantors shall not guarantee any such Indebtedness, and such Indebtedness shall have no recourse to any assets or property of the Issuer or the Guarantors;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company Issuer or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings), in the aggregate principal amount outstanding at any one time, taken together with any Indebtedness outstanding pursuant to clause (i), not to exceed (x) $10,000,000, minus (y) any principal amount of Indebtedness permanently repaid pursuant to Section 4.06(b)(i)(A);
(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 receipt by the Issuer or the applicable Restricted Subsidiary of notice of its Incurrence;
(xviii) Indebtedness of the Company Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the a Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit, to the extent such letter of credit or bank guarantee issued pursuant to such Credit Agreement is otherwise permitted by this Section 4.03;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) Indebtedness of the Company 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;
(xxi) Indebtedness of the Issuer or any Guarantor Incurred in connection with an Investment in, or representing guarantees of Indebtedness of, joint ventures of the Issuer or any Guarantor in an aggregate principal amount, at any one time outstanding, not to exceed $1,000,000 at the time of Incurrence;
(xxii) Indebtedness issued by of the Company or a Restricted Subsidiary to current or former officers, directors and employees thereof Issuer or any direct Guarantor issued to (x) any joint venture (regardless of the form of legal entity) that is not a Subsidiary or indirect parent thereof, or their respective estates, spouses or former spouses(y) any Unrestricted Subsidiary, in each case arising in the ordinary course of business in connection with the cash management operations (including with respect to finance the purchase or redemption of Equity Interests intercompany self-insurance arrangements) of the Company Issuer or any Guarantor, at any one time not to exceed $500,000;
(xxiii) the Incurrence by the Issuer or any Guarantor of its direct or indirect parent companies Subordinated Indebtedness that is unsecured and subordinated in right of payment to the Securities with a Stated Maturity and, if applicable, a First Amortization Date no earlier than 91 days following the Stated Maturity of the Securities;
(xxiv) Indebtedness related to unfunded pension fund and other employee benefit plan obligations and liabilities to the extent they are permitted to remain unfunded under applicable law;
(xxv) Indebtedness of Restricted Subsidiaries that are not Guarantors, at any one time not to exceed $1,000,000 at the time of Incurrence; and
(xxvi) Indebtedness of the Issuer or any Restricted Subsidiary to the extent the net proceeds thereof are substantially concurrently (i) used to purchase all of the Securities pursuant to a Change of Control Offer, a tender offer or pursuant to Section 4.04(b)(iv)3.01 or (ii) deposited to defease all of the Securities as described in Article 8. For purposes of determining compliance with this Section 4.03, in the event that an item, item of Indebtedness or a portion of such item, taken by itself, of Indebtedness, Disqualified Stock (or Preferred Stock any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xxiixxvi) above of this Section 4.03(b) or such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a), the Company Issuer shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Facio
Appears in 1 contract
Sources: Indenture (Egalet Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company So long as the Bonds are outstanding, the Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. Stock or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if (i) the Fixed Charge Consolidated Leverage Ratio of the Issuer would have been less than or equal to 4.0 to 1.0, and (ii) the Interest Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued Issuer would have been at least 2.00 2.0 to 1.00 1.0, in each case determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock 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 period for which calculation of the Consolidated Leverage Ratio and the Interest Coverage Ratio is being performed.
(b) The limitations set forth in Section 4.03(aCondition 9.4(a) shall not apply to:
(i) the Incurrence by the Company Issuer or its Restricted Subsidiaries of Indebtedness under the a 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) up to an in the aggregate principal amount outstanding at any one time not to exceed:
exceed US$50,000,000 (1) an amount equal to or the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefromDollar Equivalent thereof), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company Issuer, the Guarantors and the Guarantors Pledgors of Indebtedness represented by the Securities (not including any Additional Securities) Bonds, the Guarantees and the Existing First-Lien Notes issued on Liens securing the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) Bonds and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof)Guarantees;
(aiii) Indebtedness existing and in force on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(bCondition 9.4(b)) and (b) [reserved]);
(aiv) Indebtedness (including Capitalized Capitalised Lease Obligations) Incurred by the Company Issuer or any of its Restricted SubsidiariesSubsidiary, and Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company Subsidiary, to finance (whether prior to or within 270 days after) the purchaseacquisition, lease, construction construction, repair, replacement or improvement of or to borrow against property (real or personal) or equipment (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 amount whichthat, when aggregated with the principal amount of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv)) following the Issue Date, does not exceed US$60,000,000 (or the greater of $75.0 million and 5.0% of Total Assets at the time of IncurrenceDollar Equivalent thereof);
(v) Indebtedness 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 including, but not limited, 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 authoritiesGovernmental Authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims;
(vi) Indebtedness arising from agreements of the Company Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, any assets or a Subsidiary of the Company Issuer in accordance with the terms of this IndentureInstrument, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such IndebtednessGuarantor;
(viii) shares of Preferred Stock of a Restricted Subsidiary Guarantor 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 Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred StockGuarantor;
(ix) Indebtedness of a Restricted Subsidiary Guarantor to the Company Issuer or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 of the Issuer or any Restricted Subsidiary that are not Incurred incurred for speculative purposes andbut: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture Instrument to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(xii) Indebtedness or Disqualified Stock of the Company Issuer or any Restricted Subsidiary of the Company and Preferred Stock of any Restricted Subsidiary of the Company not otherwise permitted hereunder under this Instrument in an aggregate principal amountamount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million the greater of US$10,000,000 (or the Dollar Equivalent thereof) and 2.5 per cent. of Total Assets at any one time outstanding (it being understood that any Indebtedness Incurred under 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(aCondition 9.4(a) from and after the first date on which the CompanyIssuer, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(aCondition 9.4(a) without reliance upon this clause (xii));
(xiii) any guarantee (or co-issuance in by the case of Finance Co.) by an Issuer or a Guarantor of Indebtedness or other obligations of the Company Issuer or any of its Restricted Subsidiaries Subsidiary so long as the Incurrence of such Indebtedness Incurred by such the Issuer or such Restricted Subsidiary is permitted under the terms of this IndentureInstrument; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Securities Bonds or the Note Guarantee of such Restricted Subsidiary, as applicable, any such guarantee (or co-issuance in the case of Finance Co.) of such Issuer or such Guarantor Restricted Subsidiary with respect to such Indebtedness shall be subordinated in right of payment to the Securities or such GuarantorRestricted Subsidiary’s Note Guarantee with respect to the Securities, as applicable, Bonds substantially to the same extent as such Indebtedness is subordinated to the Securities Bonds or the Note Guarantee of such Restricted Subsidiary, as applicable;; ▇▇ ▇▇▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇ ▇)
(xiv) the Incurrence by the Company Issuer or any of its Restricted Subsidiaries Subsidiary of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company which that serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(aCondition 9.4(a) and clauses (ii), (iii)(aiii), (iv), (xii) (xiv), (xv), (xix) and/or and (xxxxi) of this Section 4.03(bCondition 9.4(b) or any Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock, including any Indebtedness, additional Indebtedness or Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums), fees, expenses and fees in connection therewith defeasance costs (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity); provided, however, provided that such Refinancing Indebtedness:
(1A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which that is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Indebtedness or Disqualified Stock being refunded, refinanced or Preferred Stock being refunded or refinanced defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date that is one year following the last maturity date of any Securities Bonds then outstanding were instead due on such date one year following the last date of maturity of the Securitiesdate;
(2B) has a Stated Maturity which that 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 Stated Maturity of the SecuritiesBonds;
(3C) to the extent such Refinancing Indebtedness refunds, refinances or defeases (a) Indebtedness junior to the Securities Bonds or the Note Guarantee of such Restricted Subsidiarya Guarantee, as applicable, such Refinancing Indebtedness is junior to the Securities Bonds or the Note Guarantee of such Restricted Subsidiarya Guarantee, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;
(4D) 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 refunded, refinanced or defeased plus premium (including tender premium), fees fees, expenses and expenses defeasance costs Incurred in connection with such refinancing;
(5E) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer or a Restricted Subsidiary that is a Guarantorrefunds, refinances or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances defeases Indebtedness of an Unrestricted Subsidiary; and
(6F) in the case of any Refinancing Indebtedness Incurred to refund, refinance or defease Indebtedness outstanding under clause (iv), (xii), (xix) or (xixxxi) of this Section 4.03(bCondition 9.4(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv), (xii), (xix) or (xixxxi) of this Section 4.03(bCondition 9.4(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses clause (iv), (xii), (xix) or (xixxxi) of this Section 4.03(bCondition 9.4(b); provided, further, that subclauses (A) subclauses (1), (2) and (3B) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereofBank Indebtedness;
(xv) Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of (ax) the Company Issuer or any of its Restricted Subsidiaries, Subsidiary Incurred to finance an acquisition of any property or assets or (by) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiaries Subsidiary or merged merged, consolidated or amalgamated with or into the Company Issuer or a Restricted Subsidiary in accordance with the terms of this IndentureInstrument; providedprovided that, howeverin each case, that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger, consolidation or amalgamation either:
(1A) the Company Issuer would be permitted to Incur at least $US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Consolidated Leverage Ratio test set forth in the first sentence of Section 4.03(aCondition 9.4(a); or
(2B) the Fixed Charge Coverage Consolidated Leverage Ratio would be greater less than immediately prior to such acquisitionacquisition or merger, consolidation or amalgamation;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company Issuer or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Securitisation Undertakings); provided that the aggregate principal amount of Indebtedness permitted by this clause (xvi) at any time outstanding does not exceed US$25,000,000 (or the Dollar Equivalent thereof);
(xvii) Indebtedness arising from the honoring honouring 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 Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the a Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit, to the extent such letter of credit or bank guarantee issued pursuant to such Credit Agreement is otherwise permitted by this Condition 9.4;
(xix) Contribution IndebtednessIndebtedness in an aggregate principal amount at any time not to exceed US$250,000,000;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) Indebtedness of the Company 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;
(xxiixxi) Indebtedness issued by of the Company Issuer or a any Restricted Subsidiary to current Incurred in connection with an Investment in, or former officersrepresenting guarantees of Indebtedness of, directors and employees thereof joint ventures of the Issuer or any direct Restricted Subsidiary in an aggregate principal amount, at any one time outstanding, not to exceed (A) US$25,000,000 (or indirect parent the Dollar Equivalent thereof) in the case of Indebtedness Incurred in connection with an Investment in, or their respective estatesrepresenting guarantees of Indebtedness of, spouses any Restricted Subsidiary, or former spouses(B) US$5,000,000 in the case of Indebtedness Incurred in connection with an Investment in, or representing guarantees of Indebtedness of, any joint venture, in each case to finance the purchase or redemption of Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving FaciIncurrence;
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Affiliated Guarantors and the Company shall not, and shall not permit any of its Restricted Subsidiaries the Company’s Subsidiaries, any Neon Entity or any XBP Entity to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) XBP Parent shall not permit any other XBP Entity and the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. or any Subsidiary that is a Guarantor) to issue any shares of Preferred Stock; provided, however, that any an Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case case, in an aggregate amount not to exceed $25 million, if the Fixed Charge Coverage Ratio of the Company for the most recently ended four full fiscal quarters for which internal financial statements are available have been delivered to the Trustee 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 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 any Subsidiary that is not an Issuer or a Guarantor may not incur Indebtedness or issue shares of Disqualified Stock or Preferred Stock in excess of $0.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company or its Restricted Subsidiaries any Subsidiary of the Indebtedness under represented by (A) the Credit Agreement and Notes (including any PIK Notes, but excluding any Additional Notes), (B) the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a Existing 2023 Notes, in an aggregate principal amount equal not to exceed $[____]1, (C) the face Existing 2026 Notes, in an aggregate principal amount thereofnot to exceed $[____]2 (D) the Old Term Loans, in an aggregate principal amount not to exceed $[_____]3 and (E) Permitted Securitization Financings, plus (F) up to an additional aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal of $5 million, so long as the Senior Secured Leverage Ratio for the most recently ended four full fiscal quarters for which financial statements have been delivered to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such thatTrustee, determined on a pro forma basis after giving effect basis, does not exceed 3.75 to 1.00, and the incurrence of such Indebtedness (and application Incurrence by the Affiliated Guarantors of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00Indebtedness represented by clauses (A) and (D) above;
(ii) the Incurrence by Indebtedness of the Company and under any Super Senior Facility; 1 NTD: To be the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued amount outstanding on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after closing date. 2 NTD: To be the Existing First-Lien Issue Date) and amount outstanding on the guarantees thereof, as applicable (including closing date. 3 NTD: To be the exchange securities and related guarantees thereof);amount outstanding on the closing date.
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) and described on Schedule 4.03 hereto (other than Indebtedness described in clauses clause (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(a1) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Company, any Neon Entity or any of its Restricted SubsidiariesSubsidiary, Disqualified Stock issued by the Company or any of its Restricted Subsidiaries Subsidiary and Preferred Stock issued by any Restricted Subsidiaries of the Company Subsidiary to finance (whether prior to or within 270 180 days after) the purchaseacquisition, lease, construction construction, repair, replacement or improvement by such Person of property (real or personal) or equipment (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 amount whichthat, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and or Preferred Stock then outstanding that was and Incurred pursuant to this clause (iviv)(1), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) below, does not exceed $35 million (plus, in the greater case of $75.0 million any Refinancing Indebtedness, the Additional Refinancing Amount); and 5.0% (2) Capitalized Lease Obligations or other obligations or deferrals attributable to capital spending or other funds made available by suppliers in connection with any sale and leaseback arrangements not in violation of Total Assets at the time of Incurrencethis Indenture;
(v) Indebtedness Incurred by the Company, any Subsidiary of the Company or any Affiliated Guarantor owed to (including obligations in respect of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and or bank guarantees issued in or similar instruments for the ordinary course of business, including without limitation letters of credit in respect of benefit of) any Person providing workers’ compensation claimscompensation, health, disability or other employee benefits to employees or former employees or their families or property, casualty or liability insurance to the Company or self-insuranceany of the Company’s Subsidiaries or any Affiliated Guarantor (including any XBP Entity), and letters of credit in connection with the maintenance ofrespectively, or pursuant to reimbursement or indemnification obligations to such Person, in each case, provided in the requirements of, environmental ordinary course of business or other permits or licenses from governmental authorities, or other Indebtedness consistent with respect to reimbursement type obligations regarding workers’ compensation claimsindustry practices;
(vi) Indebtedness arising from agreements of the Company or a Restricted any Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred or assumed in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this IndentureSubsidiary, 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, in each case, to the extent such obligation or transaction is permitted by this Indenture;
(vii) Indebtedness of the Company to a Restricted Subsidiaryany of its Subsidiaries; 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 owed to a Restricted Subsidiary that is neither Finance Co. nor not an Issuer or a Subsidiary that is a Guarantor is subordinated in right of payment to the obligations of the Company Issuers under the SecuritiesNotes; 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 of the Company 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 IndebtednessIndebtedness not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred StockStock not permitted by this clause (viii);
(ix) Indebtedness of a Restricted any Subsidiary to the Company or another Restricted any other Subsidiary; provided that if Finance Co. or a Subsidiary that is a Guarantor Incurs incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not an Issuer or 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 Securities (in the case of Finance Co.) or the Note Guarantee of such Guarantor, as applicableSubsidiary; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary of the Company holding such Indebtedness ceasing to be a Restricted Subsidiary of the Company or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted SubsidiarySubsidiary of the Company 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 IndebtednessIndebtedness not permitted by this clause (ix);
(x) Hedging Obligations by a Person that are not Incurred incurred for speculative purposes and: but (1A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness of such Person that is permitted by the terms of this Indenture to be outstanding; (2B) for the purpose of fixing or hedging currency exchange rate risk of such Person with respect to any currency exchanges; and/or or (3C) for the purpose of fixing or hedging commodity price risk of such Person with respect to any commodity purchases or salessales and, in each case, extensions or replacements thereof;
(xi) obligations (including reimbursement obligations with respect to letters Indebtedness of credit the Affiliated Guarantors, the Company and bank guarantees) the Subsidiaries in respect of performanceperformance bonds, bidbid bonds, appeal and bonds, surety bonds and completion guarantees provided by and similar obligations, in each case, reasonably required in the conduct of their respective business (giving effect to any growth or expansion of such business permitted hereunder), including those incurred to secure health, safety, insurance and environmental obligations of the Affiliated Guarantors, the Company or any Restricted Subsidiary and the Subsidiaries, respectively, as conducted in the ordinary course of businessaccordance with good and prudent business industry practices and otherwise as permitted by this Indenture;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) below, does not exceed $100.0 25 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a) from and after the first date on which the Companyplus, or the Restricted Subsidiary, as in the case may beof any Refinancing Indebtedness, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii)the Additional Refinancing Amount);
(xiii) [reserved];
(xiv) any guarantee (by the Company or co-issuance in the case of Finance Co.) by an Issuer or a Guarantor any Subsidiary of Indebtedness or other obligations of the Company or any of its Restricted Subsidiaries Subsidiary so long as the Incurrence of such Indebtedness Incurred or other obligations by such Issuer 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 Securities Notes or the Note Guarantee of the Company or 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 Notes or such Guarantor’s Note Guarantee with respect to the SecuritiesGuarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities Notes or the Note Guarantee of such Restricted SubsidiaryGuarantee, 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;
(xivxv) the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company which 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 (i)(F), (ii), (iii)(aiii), (iviv)(1), (xivxii), (xiii), (xv), (xix) and/or xvi), (xx) and (xxiii) of this Section 4.03(b) or any in an aggregate amount not to exceed the then-outstanding principal amount (or, if applicable, the liquidation preference face amount of the Indebtedness, Disqualified Stock or Preferred Stock Incurred to being so refund refunded, refinanced or refinance such Indebtednessdefeased), Disqualified Stock or Preferred Stocktogether with any accrued interest and any related fees, including any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay expenses and premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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 or refinanced that were due on or after the date that is one year following the last maturity date of any Securities Notes then outstanding were instead due on such date one year following the last date (provided that this subclause (1) will not apply to any refunding or refinancing of maturity of the Securitiesany Secured Indebtedness constituting First-Priority Obligations);
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior subordinated in right of payment to the Securities Notes or the Note Guarantee of such Restricted Subsidiarya Guarantee, as applicable, such Refinancing Indebtedness is junior subordinated in rights of payment to the Securities Notes or the Note Guarantee of such Restricted SubsidiaryGuarantee, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;
(3) shall not be secured by any Lien on any asset other than the assets that secured such Indebtedness being extended, refinanced or modified or, if applicable, shall be unsecured;
(4) is Incurred in an aggregate amount shall not (or if issued with original issue discount, an aggregate issue pricesecured) that is equal to or less have a Lien priority greater than the aggregate amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the such Indebtedness being extended, refinanced plus premium, fees and expenses Incurred in connection with such refinancing;or modified; and
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is neither Finance Co. nor not an Issuer or a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xvxvi) Indebtedness, Disqualified Stock or Preferred Stock of (aA) the Company or any of its Restricted Subsidiaries, Incurred Subsidiary incurred to finance an acquisition or (bB) Persons that are acquired by the Company or any of its Restricted Subsidiaries Subsidiary or merged merged, consolidated or amalgamated with or into the Company or a Restricted any Subsidiary in accordance with the terms of this Indenture; provided, however, provided that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger, consolidation or amalgamation, either:
(1) the Company would be permitted to Incur 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 of the Company would be greater no less than immediately prior to such acquisition;
acquisition or merger, consolidation or amalgamation; provided further, that the aggregate principal amount of Indebtedness under this clause (xvi) (solely if incurred in contemplation of such acquisition or merger, consolidation or amalgamation), together with any Refinancing Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is respect thereof incurred under clause (xv) hereof, shall not recourse to exceed $10 million (plus, in the Company or case of any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization UndertakingsRefinancing Indebtedness, the Additional Refinancing Amount);
(xvii) [reserved];
(xviii) 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; business (provided that such Indebtedness is extinguished within five Business Days of its Incurrence) or other cash management services in the ordinary course of business;
(xviiixix) Indebtedness of the Company or any Restricted Affiliated Guarantor or Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit AgreementBank Indebtedness, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries any Subsidiary that is not an Issuer or a Guarantor; provided, however, that the aggregate principal amount of Indebtedness Incurred for working capital purposesunder this clause (xx), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), together with Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) hereof, does not exceed $3 million (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);
(xxi) Indebtedness of the Company or any Restricted Affiliated Guarantor or Subsidiary consisting of (xA) the financing of insurance premiums or (yB) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and;
(xxii) Indebtedness of the Company, the Affiliated Guarantors and their respective Subsidiaries in respect of letters of credit, bank guarantees, warehouse receipts or similar instruments issued by to support their respective performance obligations and trade letters of credit (other than obligations in respect of other Indebtedness) in the Company or a Restricted Subsidiary to current or former officersordinary course of business;
(xxiii) Indebtedness, directors and employees thereof or any direct or indirect parent thereofIncurred on behalf of, or their respective estatesrepresenting guarantees of Indebtedness of, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests joint ventures of the Company or and any Subsidiary; provided, however, that the aggregate principal amount of its direct or indirect parent companies to Indebtedness Incurred under this clause (xxiii), when aggregated with the extent permitted under Section 4.04(b)(iv). For purposes principal amount 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 all other Indebtedness described in clauses (i) through (xxii) above or such item is (or portion, taken by itself, would be) entitled to be then outstanding and Incurred pursuant to Section 4.03(athis clause (xxiii), the Company shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or together with any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving FaciRef
Appears in 1 contract
Sources: Restructuring Support Agreement (Exela Technologies, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company shall UK Holdco will not, and shall will not permit any of its the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall UK Holdco will not permit any of its the Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer UK Holdco and any of the Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary Subsidiaries may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any of the Restricted Subsidiary Subsidiaries may issue shares of Preferred Stock, in each case case, if either (A) the Fixed Charge Interest Coverage Ratio of the Company for the most recently ended four full fiscal quarters Reference Period is at least 2.00 to 1.00 or (B) the Total Net Leverage Ratio for which internal financial statements are available immediately preceding the date most recently ended Reference Period does not exceed 6.50 to 1.00 (any such debt incurred pursuant to this proviso, “Ratio Debt”), in each case determined on which such additional a Pro Forma Basis; provided, further, however, that the aggregate principal amount of Indebtedness is (excluding Acquired Indebtedness not Incurred in connection with or such in contemplation of the applicable merger, acquisition or other similar transaction) that may be Incurred and Disqualified Stock or Preferred Stock is that may be issued would have been at least 2.00 pursuant to 1.00 determined on a pro forma basis this clause (including a pro forma application a) by Restricted Subsidiaries that are not Borrowers or Guarantors, taken together with the principal amount of the net proceeds therefrom), as if the additional all such Indebtedness had been Incurred, or the Incurred and Disqualified Stock or Preferred Stock had been issued, as issued by Restricted Subsidiaries that are not Borrowers or Guarantors outstanding pursuant to paragraph (1) of the case may be, final proviso to clause (b)(vi) and the application final proviso to clause (b)(xxii)(x) of proceeds therefrom had occurred this Section 7.2, shall not exceed the greater of $125,000,000432,000,000 and 39% of Consolidated EBITDA as of the most recently ended Reference Period at the beginning of such four-quarter periodany one time outstanding.
(b) The limitations set forth in Section 4.03(a7.2(a) shall not apply to:to (collectively, “Permitted Debt”):
(i) the Incurrence by the Company Indebtedness Incurred pursuant to this Agreement, any other Loan Document or its Restricted Subsidiaries of any Loan Note Instrument (including any Indebtedness under the Credit Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed incurred pursuant to have a principal amount equal to the face amount thereof) up to an aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such thatSection 2.25, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom2.26 or 2.28), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company Borrowers and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Senior Secured Notes issued on the Existing First-Lien Issue Closing Date (, the 2028 Senior Secured Notes issued on the date of the 2028 Senior Secured Notes Indenture and the 2029 Senior Unsecured Notes issued on the date of the 2029 Senior Unsecured Notes Indenture (in each case, not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Datenotes) and the guarantees thereofguarantees, as applicable (including the exchange securities and related guarantees thereof)applicable;
(aiii) Indebtedness existing on the Existing First-Lien Issue Closing Date (after giving effect to or the Transactions) Amendment No. 6 Effective Date (other than Indebtedness described in clauses (iSection 7.2(b)(i) and (ii)) (in the case of any individual item of Indebtedness in a principal amount in excess of $5,000,00025,000,000, to be set forth on Schedule 7.2);
(iv) Permitted First Priority Refinancing Debt and Permitted Second Priority Refinancing Debt;
(v) Permitted Unsecured Refinancing Debt;
(vi) Indebtedness, Disqualified Stock or Preferred Stock (“Incremental Equivalent Debt”) not to exceed an amount equal to the sum of (x) an unlimited amount at any time so long as (A) in the case of Indebtedness that is secured by a Lien on the Collateral on a pari passu basis with the Obligations, the First Lien Net Leverage Ratio for the most recently ended Reference Period does not exceed 5.00 to 1.00, (B) in the case of Indebtedness that is secured by a Lien on the Collateral other than on a pari passu basis with the Obligations, the Secured Net Leverage Ratio for the most recently ended Reference Period does not exceed 6.50 to 1.00 or (C) in the case of Indebtedness that is unsecured or is secured by a Lien on assets that do not constitute Collateral, and in the case of Disqualified Stock or Preferred Stock, either (1) the Total Net Leverage Ratio for the most recently ended Reference Period does not exceed 6.50 to 1.00 or (2) the Interest Coverage Ratio for the most recently ended Reference Period is at least 2.00 to 1.00, in each case on a Pro Forma Basis (but without giving effect to the cash proceeds of any such Indebtedness remaining on the balance sheet and calculated assuming that any such Indebtedness is fully drawn throughout such period), plus (y) the amount of all prior voluntary prepayments, loan buybacks (with credit given to the principal amount thereof) and commitment reductions of Term Loans, Revolving Loans, Incremental Loans, Indebtedness incurred pursuant to this Section 7.2(b)(vi) that is secured by a Lien on the Collateral on a pari passu basis with the Obligations and Permitted Credit Agreement Refinancing Debt and Refinancing Indebtedness previously applied to the permanent repayment of any of the foregoing and the amount of any prepayments made to any Lender pursuant to Section 2.23, with any replacement of a Lender pursuant thereto being deemed, solely for this purpose, to constitute a prepayment (in each case, to the extent not funded with the proceeds of long-term Indebtedness (except Indebtedness under one or more revolving credit or similar facilities) or the proceeds of Permitted Cure Securities applied pursuant to Section 9.4 and, with respect to any prepayment or commitment reduction of or in respect of revolving loans, to the extent accompanied by a permanent reduction in such revolving commitments) (minus the aggregate principal amount of Indebtedness Incurred under Section 2.25(a)(i)(y)), plus (z) an amount equal to the greater of $325,000,0001,108,900,000 and 100% of Consolidated EBITDA on a Pro Forma Basis as of the most recently ended Reference Period (and after giving effect to any acquisition or other transaction consummated concurrently therewith) (minus the aggregate outstanding principal amount of Indebtedness Incurred under Section 2.25(a)(i)(z)) (provided that, for the avoidance of doubt, the amount available to the Borrowers pursuant to clauses (y) and (z) above shall be available at all times and shall not be subject to any ratio test described in foregoing clause (x) above), which amount may be secured on a pari passu or junior basis; provided, that:
(1) the principal amount of such Indebtedness (excluding Acquired Indebtedness not Incurred in connection with or in contemplation of the applicable merger, acquisition or other similar transaction) that may be Incurred and Disqualified Stock or Preferred Stock that may be issued pursuant to this clause (vi) by Restricted Subsidiaries that are not Borrowers or Guarantors, shall not exceed the greater of $125,000,000432,000,000 and 39% of Consolidated EBITDA as of the most recently ended Reference Period at any one time outstanding (minus the outstanding principal amount of such Indebtedness Incurred by Restricted Subsidiaries that are not Borrowers or Guarantors pursuant to the second proviso to clause (a) and the final proviso to clause (b)(xxii)(x) of this Section 4.03(b7.2);
(2) the Applicable Requirements shall have been satisfied;
(3) no Indebtedness under this clause (vi) may be Incurred at any time that an Event of Default has occurred and is continuing (bunless such Indebtedness is used to finance, in whole or in part, a Limited Condition Transaction, in which case the absence of an Event of Default shall be tested on the date specified in Section 1.4);
(4) any such Indebtedness in the form of Dollar denominated broadly syndicated term “B” loans Incurred under this clause (vi) that is secured by a Lien on the Collateral on a pari passu basis with the Obligations shall be subject to the MFN Provision set forth in Section 2.25(a)(vii) (giving effect to all exceptions thereto, mutatis mutandis for Incremental Equivalent Debt);
(5) [reserved];; and
(a6) (A) for the avoidance of doubt, if the applicable Borrower incurs Indebtedness under clause (x) above on the same date that it incurs Indebtedness under clauses (y) or (z) above, then the applicable incurrence ratio will be calculated with respect to such incurrence under clause (x) without regard to any incurrence of Indebtedness under clauses (y) or (z) and (B) unless the applicable Borrower elects otherwise, any Indebtedness incurred pursuant to this clause (vi) shall be deemed incurred first under clause (x) above, with the balance incurred under clauses (y) and (z) above.
(vii) Indebtedness (including including, without limitation, Capitalized Lease Obligations, mortgage financings or purchase money obligations) Incurred by the Company UK Holdco or any of its the Restricted Subsidiaries, Disqualified Stock issued by the Company UK Holdco or any of its the Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries to finance all or any part of the Company to finance (whether prior to or within 270 days after) the acquisition, purchase, lease, construction construction, design, installation, repair, replacement or improvement of property (real or personal) ), plant or equipment or other fixed or capital assets used or useful in the business of UK Holdco or the Restricted Subsidiaries or 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 amount whichamount, when aggregated with the principal amount of including all other IndebtednessIndebtedness Incurred to renew, Disqualified Stock and Preferred Stock then outstanding that was refund, Refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clause (ivvii), does not to exceed the greater of $75.0 million 150,000,000521,000,000 and 5.047% of Total Assets Consolidated EBITDA as of the most recently ended Reference Period at any one time outstanding (minus amounts incurred and outstanding under clause (xvi) in respect of Indebtedness originally incurred under this clause (vii)); provided, that Capitalized Lease Obligations incurred by UK Holdco or any Restricted Subsidiary pursuant to this clause (vii) in connection with a Sale Leaseback Transaction shall not be subject to the time foregoing limitation so long as the proceeds of Incurrencesuch Sale Leaseback Transaction are used by UK Holdco or such Restricted Subsidiary to permanently repay outstanding loans under any credit agreement, debt facility or other Indebtedness secured by a Lien on the assets subject to such Sale Leaseback Transaction;
(vviii) Indebtedness Incurred by (x) in respect of any bankers’ acceptance, bank guarantees, discounted bill of exchange or the Company discounting or any factoring of its Restricted Subsidiaries receivables, warehouse receipt or similar facilities, and reinvestment obligations related thereto, entered into in the ordinary course of business and (y) 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, however, that upon the drawing of such letters of credit or the Incurrence of such Indebtedness, such obligations are reimbursed within 45 days following such drawing;
(viix) Indebtedness arising from agreements of the Company UK Holdco or a Restricted Subsidiary providing for indemnification, adjustment of purchase price price, earnout or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company UK Holdco in accordance with the terms of this IndentureAgreement, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viiix) shares of Preferred Stock of a Restricted Subsidiary issued to the Company UK Holdco 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 UK Holdco or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(a), (iv), (xiv), (xv), (xix) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Faci
Appears in 1 contract
Sources: Credit Agreement (Clarivate PLC)
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, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer the Company and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the 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) up to an aggregate principal amount of $805 million outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00time;
(ii) the Incurrence by the Company Issuers and the Guarantors of Indebtedness represented by (i) the Securities $485.0 million in aggregate principal amount of 9 1/2% Senior Notes due 2014 issued by the Issuers on July 21, 2006 (not including any Additional Securitiesthe “Original 2014 Notes”) and the Existing First-Lien related guarantees thereof (including exchange Original 2014 Notes issued on and related guarantees thereof), and (ii) the Existing First-Lien Issue Date Senior Subordinated Notes (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue DateSenior Subordinated Notes) and the related guarantees thereof, as applicable thereof (including the exchange securities Existing Senior Subordinated Notes and related guarantees thereof);
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(iv) (a) Indebtedness (including Capitalized Lease Obligations) 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, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.04.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Apollo Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred incurred for speculative purposes andand either: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (or co-issuance in by the case of Finance Co.) by an Issuer 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 such Issuer 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(aiii), (iv), (xiv), (xv), (xix) and/or and (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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the last maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness equal to or junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior equal to or junior, as applicable, to the Securities 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 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 neither Finance Co. nor not a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xixxx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (32) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;Bank Indebtedness.
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; 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 pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; and
(xxii) Indebtedness issued by the Company consisting of customary indemnification, adjustment of purchase price 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 similar obligations of the Company or any Restricted Subsidiary, in each case Incurred in connection with the acquisition or disposition of its direct any assets by the Company or indirect parent companies to the extent permitted under Section 4.04(b)(iv)any Restricted Subsidiary. 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, 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 such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a), the Company Issuers shall, in its their sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving FaciCredit 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 any portion of such Indebtedness 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 guarantee or letter of credit, as the case may be, was in compliance with this Section 4.03. For purposes of determining co
Appears in 1 contract
Sources: Indenture (OEI, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and and
(ii) the Company Borrower shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; providedPROVIDED, howeverHOWEVER, that any Issuer the Borrower and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary of the Borrower may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Debt to Adjusted EBITDA Ratio of the Company Borrower 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 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 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 limitations set forth in Section 4.03(a10.1(a) shall not apply to:to (collectively, "PERMITTED DEBT"):
(i) the Incurrence by the Company Borrower or its Restricted Subsidiaries of Indebtedness under the any Credit Agreement 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) up to an aggregate principal amount of $4,000.0 million outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00time;
(ii) the Incurrence by the Company Borrower and the Guarantors its Restricted Subsidiaries of Indebtedness represented by the Securities Intelsat Bermuda Notes (not including and any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereof, as and exchange notes in respect thereof in accordance with the applicable registration rights agreement), the Loans and any Guarantees, if applicable (including the exchange securities and related guarantees any Exchange Notes and Guarantees thereof);
(aiii) Indebtedness of the Borrower and its Restricted Subsidiaries existing on the Existing First-Lien Issue Closing Date, including any Indebtedness incurred on the Closing Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b10.1(b)) and (b) [reserved]);
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Borrower or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company Borrower or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company Borrower to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of (x) $75.0 450.0 million and 5.0(y) 4% of Total Assets of the Borrower at the time of Incurrence;
(v) Indebtedness 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 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;
(vi) Indebtedness arising from agreements of the Company Borrower or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or the disposition of any business, assets or a Subsidiary of the Company Borrower in accordance with the terms of this IndentureAgreement, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Borrower to a Restricted Subsidiary; provided PROVIDED that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company Borrower under the SecuritiesLoans; providedPROVIDED, furtherFURTHER, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Borrower or another Restricted Subsidiary; provided 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 Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company Borrower or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee of such Guarantor, as applicable; provided, furtherPROVIDED, 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 Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are not Incurred (other than for speculative purposes and: purposes) (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture Agreement to be outstanding; or (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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(a), (iv), (xiv), (xv), (xix) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Faci
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) From and after the Escrow Release Date:
(i) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company Issuer shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Subsidiary Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Subsidiary Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company Issuer 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 or such Disqualified Stock or Preferred Stock is issued 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 period.. -44-
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) (x) the Incurrence by the Company Issuer or its Restricted Subsidiaries of Secured Indebtedness under the any Credit Agreement 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) up to in the aggregate principal amount of $9,000.0 million plus an aggregate additional principal amount outstanding at any one time that does not cause the Secured Indebtedness Leverage Ratio of the Issuer to exceed:
(1) an amount equal exceed 4.00 to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that1.00, determined on a pro forma basis after giving effect to the incurrence of such Indebtedness (and including a pro forma application of the net proceeds therefrom)) and (y) the Incurrence by the Issuer or its Restricted Subsidiaries of Secured Indebtedness under the Revolving Credit Agreement or any other Credit Agreement that is a revolving, working capital or liquidity facility in an aggregate amount not to exceed the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00of (A) $1,250.0 million and (B) the Borrowing Base as of the date of such Incurrence;
(ii) the Incurrence by the Company Issuer and the Subsidiary Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofSubsidiary Guarantees, as applicable (including the exchange securities and related guarantees thereof)applicable;
(aiii) (x) the Incurrence by the Issuer and the Subsidiary Guarantors of Indebtedness represented by the Second Priority Notes in an aggregate amount not to exceed $500.0 million and the subsidiary guarantees thereof and (y) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i), (ii) and (iiiii)(x) of this Section 4.03(b)) and (b) [reserved]);
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company Issuer to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Original Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Company Issuer occurring after September 20, 2006 and before the Escrow Release Date, and any other acquisition or disposition of any business, assets or a Subsidiary of the Issuer occurring on or after the Escrow Release Date in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Subsidiary Guarantor is subordinated in right of payment to the obligations of the Company Issuer under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) 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 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 Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that if Finance Co. or a Subsidiary Guarantor Incurs incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor Subsidiary Guarantor, such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Subsidiary Guarantee of such Subsidiary 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 Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are not Incurred incurred for speculative purposes andand either: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk (including resin price risk) with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company Issuer or any Restricted Subsidiary of the Company Issuer and Preferred Stock of any Restricted Subsidiary of the Company Issuer not otherwise permitted hereunder 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 (xii), does not exceed the greater of $100.0 425.0 million and 5.0% of Total Assets at any one the time outstanding 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 CompanyIssuer, 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 (or co-issuance in by the case of Finance Co.) by an Issuer or a Subsidiary Guarantor of Indebtedness or other obligations of the Company Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by such 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 Securities or the Note Subsidiary Guarantee of such Restricted Subsidiary, as applicable, any such guarantee (or co-issuance in the case of Finance Co.) of such Issuer or such Subsidiary Guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Securities or such Subsidiary Guarantor’s Note Subsidiary Guarantee with respect to the Securities, as applicable, Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Subsidiary Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company Issuer which 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 (i), (ii), (iii)(aiii), (iv), (xiv), (xv), (xix) and/or and (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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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 Securitiesrefinanced;
(2) has as 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 (a) Indebtedness junior to the Securities or the Note Subsidiary Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities or the Note Subsidiary 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 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 Issuer that is neither Finance Co. nor not a Subsidiary Guarantor that refinances Indebtedness of an the Issuer or a Restricted Subsidiary that is a Subsidiary Guarantor, or (y) Indebtedness of the Company Issuer 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 (i), (iv) or (xixxx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (i), (iv) or (xixxx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (i), (iv) or and (xixxx) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (32) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-First Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereofObligations;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (ax) the Company Issuer or any of its Restricted Subsidiaries, Incurred Subsidiaries incurred to finance an acquisition or (by) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiaries or merged with or amalgamated into the Company Issuer or a any of its Restricted Subsidiary Subsidiaries in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger either:
(1) the Company Issuer would be permitted to Incur 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 of the Issuer would be greater than immediately prior to such acquisitionacquisition or merger;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company Issuer 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 Incurrence;
(xviii) Indebtedness of the Company Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the any Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries; 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, at any one time outstanding, the greater of $100.0 million and 10.0% of the Total Assets held on the balance sheet of all Foreign Subsidiaries Incurred for working capital purposesof the Issuer, taken together, at the time of Incurrence;
(xxi) Indebtedness of the Company 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 issued by incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Company Issuer or a any Restricted Subsidiary to current or former officersnot in excess, directors and employees thereof or at any direct or indirect parent thereofone time outstanding, or their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Company or any greater of its direct or indirect parent companies to (i) $425.0 million and (ii) 5.0% of Total Assets at the extent permitted under Section 4.04(b)(iv)time of Incurrence. 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, 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 such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a), the Company Issuer shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving FaciTerm Loan Credit Agreement outstanding on the Issue Date and all additional Indebtedness under the Term Loan Credit Agreement outstanding on the Escrow Release Date shall be deemed to have been incurred pursuant to the fixed dollar prong of clause (i) and the Issuer 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, accretion or amortization of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of flu
Appears in 1 contract
Sources: Indenture (Berry Global Group Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company Issuer shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; providedPROVIDED, howeverHOWEVER, that any the Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary of the Issuer may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Debt to Adjusted EBITDA Ratio of the Company Issuer 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 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 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 limitations set forth in Section 4.03(a) shall not apply to:to (collectively, "PERMITTED DEBT"):
(i) the Incurrence by the Company Issuer or its Restricted Subsidiaries of Indebtedness under the any Credit Agreement 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) up to an aggregate principal amount of $4,000.0 million outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00time;
(ii) (x) the Incurrence by the Company Issuer and the Guarantors its Restricted Subsidiaries of Indebtedness represented by the Securities New Intelsat Guaranteed Notes and the Notes (not including any Additional SecuritiesNotes) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofGuarantees, as applicable (including and any Exchange Notes and Guarantees thereof) and (y) the exchange securities Incurrence by the Issuer (or any of the Guarantors) of Indebtedness under the Intelsat Bermuda Facility up to an aggregate principal amount of $600.0 million at any one time outstanding and related guarantees any Indebtedness Incurred in connection with any refinancing thereof); PROVIDED, that the aggregate amount of Indebtedness outstanding under clause (b)(ii)(y) shall not exceed $600.0 million (plus the amount of any premiums and fees in connection with any refinancings) at any one time outstanding;
(aiii) Indebtedness of the Issuer and its Restricted Subsidiaries existing on the Existing First-Lien Issue Date, including any Indebtedness incurred on the Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company Issuer to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of (x) $75.0 450.0 million and 5.0(y) 4% of Total Assets of the Issuer at the time of Incurrence;
(v) Indebtedness 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 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;
(vi) Indebtedness arising from agreements of the Company Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or the disposition of any business, assets or a Subsidiary of the Company Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided PROVIDED that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company Issuer under the SecuritiesNotes; providedPROVIDED, furtherFURTHER, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another Restricted Subsidiary; provided 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 Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee of such Guarantor, as applicable; provided, further, 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 Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are not Incurred (other than for speculative purposes and: purposes): (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; or (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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company Issuer or any Restricted Subsidiary of the Company Issuer and Preferred Stock of any Restricted Subsidiary of the Company Issuer not otherwise permitted hereunder in an aggregate principal amountamount which, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed the greater of (x) $100.0 450.0 million and (y) 4% of Total Assets of the Issuer at any one time outstanding (it being understood that any Indebtedness Indebtedness, Disqualified Stock or Preferred Stock Incurred or issued 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, Issuer or the Restricted Subsidiary, as the case may be, could have Incurred or issued such Indebtedness Indebtedness, Disqualified Stock or Preferred Stock under Section 4.03(a) without reliance upon this clause (xii));
(xiii) any guarantee (or co-issuance in by the case of Finance Co.) by an Issuer or a Guarantor Restricted Subsidiary of Indebtedness or other obligations of the Company Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred or other Obligations by such the Issuer or such Restricted Subsidiary is permitted under the terms of this Indenture; provided PROVIDED that if such Indebtedness is by its express terms subordinated in right of payment to the Securities Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, any such guarantee (or co-issuance in the case of Finance Co.) of such Issuer or such Guarantor guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Securities Notes or such Guarantor’s Note Guarantee with respect to the Securities's Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities Notes or the Note Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company Issuer which serves to refund, refund or refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(a) and clauses (ii), (iii)(aiii), (iv), (xiv), (xv), (xix) and/or ), (xx) and (xxii) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”"REFINANCING INDEBTEDNESS") prior to its respective maturity; providedPROVIDED, howeverHOWEVER, 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 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 was due on or after the date one year following the last maturity date of any Securities Notes then outstanding were instead due on such date one year following the last date of maturity of the Securitiesany Notes then outstanding;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicableNotes, such Refinancing Indebtedness is junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, Notes or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;
(43) 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, premium and fees and expenses Incurred in connection with such refinancing;
(54) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer or a Restricted Subsidiary that is a Guarantor, or (y) Indebtedness of the Company Issuer or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(65) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (iv) or (xixxx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xixxx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or and (xixxx) of this Section 4.03(b); providedand PROVIDED, furtherFURTHER, that (A) subclauses subclause (1), (2) and (3) of this clause (xiv) shall not apply to any refunding refunding, refinancing or refinancing defeasance of (A) the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereofSecured Indebtedness;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiaries or merged or amalgamated into the Company Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; providedPROVIDED, howeverHOWEVER, 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 pro forma effect to such acquisition and the Incurrence of such Indebtedness acquisition, merger or amalgamation, either:
(1) the Company Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Debt to Adjusted EBITDA Ratio test set forth in the first sentence of Section 4.03(a); or
(2) the Fixed Charge Coverage Debt to Adjusted EBITDA Ratio of the Issuer would be greater less than or equal to such ratio immediately prior to such acquisition;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse (except for Standard Securitization Undertakings) to the Company Issuer or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings)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 PROVIDED that such Indebtedness is extinguished within five Business Days of its Incurrence;
(xviii) Indebtedness of the Company Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the any Credit Agreement, in a principal amount not in excess of the stated amount of such letter of creditcredit or bank guarantee;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Restricted Subsidiaries that are not Guarantors; PROVIDED, HOWEVER, that the aggregate principal amount of Indebtedness Incurred for working capital purposesunder 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 Company 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 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 Equity Interests of the Company Issuer or any of its direct the Restricted Subsidiaries incurred to repurchase or indirect parent companies to the extent permitted under Section 4.04(b)(iv). refinance any Specified Existing PanAmSat Notes.
(c) For purposes of determining compliance with this Section 4.03Section, in the event that an item, or a portion of such item, taken by itself, item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of one or more than one of the categories of permitted Indebtedness Indebtedness, Disqualified Stock or Preferred Stock 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 4.03(a), the Company Issuer shall, in its sole discretion, discretion divide, classify or reclassify, reclassify or later divide, classify or reclassify, reclassify such item of Indebtedness Indebtedness, Disqualified Stock or any portion thereof Preferred Stock in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03and 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 PROVIDED that all Indebtedness under the FirstCredit 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 or 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 case may be, was in compliance with this Section. For purposes of determining compliance with any U.S. dollar-Lien Revolving Facidenominated 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 In
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 the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its the Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer the Company and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company or its the Restricted Subsidiaries of Indebtedness under the 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) up to an aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) an aggregate principal amount of $200.0 1,500.0 million and (2) an aggregate principal amount of Secured Indebtedness (with all Indebtedness Incurred under this clause (a) being deemed Secured Indebtedness for purposes of making the Borrowing Base; plus
(2determination hereunder) outstanding at any one time that does not cause the greater Secured Indebtedness Leverage Ratio of (x) $50.0 million and (y) an amount such thatthe Company to exceed 3.50 to 1.00, determined on a pro forma basis after giving effect to the incurrence of such Indebtedness (and including a pro forma application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company and the Guarantors of Indebtedness represented by (1) the Original Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofGuarantees, as applicable (including the exchange securities Exchange Securities and guarantees thereof) and (2) the Other Notes issued on the Issue Date under the indentures governing the Other Notes and the related guarantees thereof (including the Other Notes Exchange Securities and guarantees thereof);
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(iv) (a) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company or any of its the Restricted Subsidiaries, Disqualified Stock issued by the Company or any of its the 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, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount whichthat, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 150.0 million and 5.04.5% of Total Assets at the time of Incurrence;
(v) Indebtedness 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 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;
(vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; 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 of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) 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 neither Finance Co. nor not a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee of such Guarantor, as applicable; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which 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 that are not Incurred for speculative purposes andand are either: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed the greater of $100.0 75.0 million and 2.25% of Total Assets at any one the time outstanding 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 (or co-issuance in x) the case of Finance Co.) by an Issuer Company or a Guarantor of Indebtedness or other obligations of the Company or any of its the Restricted Subsidiaries or (y) a Foreign Subsidiary of Indebtedness or other obligations of another Foreign Subsidiary, in each case so long as the Incurrence of such Indebtedness Incurred by such Issuer 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company or any of its the Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company which 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)(aiii), (iv), (xiv), (xv), (xix) and/or and (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 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”) prior to its respective maturity; 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 last maturity date of any Securities then outstanding were instead due on such date one year following the last maturity date of such Securities (provided that any Refinancing Indebtedness Incurred in reliance on this subclause (1)(y) does not provide for any scheduled principal payments prior to the maturity date of the SecuritiesSecurities in excess of, or prior to, the scheduled principal payments due prior to such maturity for the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased);
(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 last maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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, expenses, costs and fees and expenses Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is neither Finance Co. nor not a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xixxx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xixxx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xixxx) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (32) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;Indebtedness.
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (ax) the Company or any of its the Restricted Subsidiaries, Subsidiaries Incurred to finance an acquisition or (by) Persons that are acquired by the Company or any of its 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 pro forma effect to such acquisition 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 (x) greater than immediately prior to such acquisition, merger or amalgamation and (y) equal to or greater than 1.75 to 1.00;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution IndebtednessIndebtedness 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 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), as determined in accordance with clauses (B) and (C) of 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 4.04(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof);
(xx) Indebtedness of Foreign Subsidiaries Subsidiaries; provided, however, that the aggregate principal amount of Indebtedness Incurred for working capital purposes;
under this clause (xxi) xx), when aggregated with the principal amount of all other 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; and
(xxii) Indebtedness issued by the Company or a Restricted Subsidiary to current or former officers, directors then outstanding 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 the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(athis clause (xx), the Company shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Facidoes not exceed
Appears in 1 contract
Sources: Indenture (MPM Silicones, LLC)
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, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer the Company and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the 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) up to an aggregate principal amount of $770.0 million outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00time;
(ii) the Incurrence by the Company Issuers and the Guarantors of Indebtedness represented by (x) the Original Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofGuarantees, as applicable (including the Exchange Securities and guarantees thereof) and (y) the Senior Subordinated Notes issued on the Issue Date and the related guarantees thereof (including exchange securities Senior Subordinated Notes and related guarantees thereof);
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(iv) (a) Indebtedness (including Capitalized Lease Obligations) 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, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs incurs such Indebtedness to a Restricted Subsidiary that is neither not Finance Co. nor or a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred incurred for speculative purposes andand either: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(aiii), (iv), (xiv), (xv), (xix) and/or and (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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the last maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness equal to or junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior equal to or junior, as applicable, to the Securities 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer the Company or a Restricted Subsidiary that is an Issuer or 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xixxx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Senior Indebtedness constituting First-First Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;Obligations.
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; 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 pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;; and
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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, 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 (xxiixxi) above or such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a), the Company Issuers shall, in its their sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving FaciCredit 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 any portion of such Indebtedness 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 guarantee or letter of credit, as the case may be, was in compliance with this
Appears in 1 contract
Sources: Indenture (Verso Sartell LLC)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a1) (i) The Company the Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii2) the Company Borrower shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer the Borrower and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company Borrower and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available (or, if earlier, were required to be delivered pursuant to Section 6.02(a) or (b)) 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 determined on a pro forma basis Pro Forma Basis; provided, further, that the aggregate amount of Indebtedness (including a pro forma application of the net proceeds therefrom), as if the additional any Refinancing Indebtedness had been Incurred, or the in respect thereof and any Acquired Indebtedness) that may be Incurred and Disqualified Stock or Preferred Stock had been issued, as that may be issued pursuant to the case may be, foregoing by Restricted Subsidiaries that are not Loan Parties shall not exceed the greater of (x) $100.0 million and the application (y) 3.25% of proceeds therefrom had occurred Total Assets at the beginning time of such four-quarter periodIncurrence, at any one time outstanding.
(b) The foregoing limitations set forth in Section 4.03(a) shall will not apply to:to (collectively, “Permitted Debt”):
(i) the Incurrence by the Company Borrower or its Restricted Subsidiaries of Indebtedness under the 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) Loan Documents up to an aggregate principal amount not to exceed $1,100.0 million outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00time;
(ii) the Incurrence by the Company Borrower and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) Senior Notes and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees Guarantees thereof, as applicable (including the and any exchange securities notes issued in respect of such Senior Notes and related guarantees Guarantees thereof)) in an aggregate principal amount not to exceed $475.0 million;
(aiii) Indebtedness of the Borrower or any of its Restricted Subsidiaries existing on the Existing First-Lien Issue Closing Date (after giving effect to the Transactions) (other than Indebtedness described in clauses clause (i) and or (ii) of this Section 4.03(b)) and (b) [reserved]);
(aiv) Indebtedness (including including, without limitation, Capitalized Lease ObligationsObligations and mortgage financings as purchase money obligations) Incurred by the Company Borrower or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company Borrower or any of its Restricted 132 Syniverse Credit Agreement Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company Borrower to finance (whether prior to all or within 270 days after) any part of the purchase, lease, construction construction, installation, repair or improvement of property (real or personal) ), plant or equipment or other fixed or capital assets used or useful in the business of the Borrower or its Restricted Subsidiaries or in a Similar Business (whether through the direct purchase of assets or the Capital Stock Equity Interests of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount whichor liquidation preference, when aggregated with the principal amount of including all other Indebtedness, Indebtedness Incurred and Disqualified Stock and or Preferred Stock then outstanding that was issued to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), does not to exceed the greater of (x) $75.0 million and 5.0(y) 2.5% of Total Assets at the time of Incurrence, at any one time outstanding;
(v) Indebtedness 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 without limitation letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits to employees (whether current or former employees or their families former) 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 reimbursement-type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing;
(vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company Borrower in accordance with the terms of this IndentureAgreement not exceeding the proceeds of such disposition, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Borrower to a Restricted Subsidiary; provided that any (x) if such Restricted Subsidiary is not a Guarantor, such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is shall be subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that Obligations and (y) any subsequent issuance or transfer of any Capital Stock Equity Interests or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such IndebtednessIndebtedness not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Borrower or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock Equity Interests 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 Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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)viii);
(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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(a), (iv), (xiv), (xv), (xix) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Faci
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company shall UK Holdco will not, and shall will not permit any of its the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall UK Holdco will not permit any of its the Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer UK Holdco and any of the Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary Subsidiaries may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any of the Restricted Subsidiary Subsidiaries may issue shares of Preferred Stock, in each case case, if either (A) the Fixed Charge Interest Coverage Ratio of the Company for the most recently ended four full fiscal quarters Reference Period is at least 2.00 to 1.00 or (B) the Total Net Leverage Ratio for which internal financial statements are available immediately preceding the date most recently ended Reference Period does not exceed 6.50 to 1.00 (any such debt incurred pursuant to this proviso, “Ratio Debt”), in each case determined on which such additional a Pro Forma Basis; provided, further, however, that the aggregate principal amount of Indebtedness is (excluding Acquired Indebtedness not Incurred in connection with or such in contemplation of the applicable merger, acquisition or other similar transaction) that may be Incurred and Disqualified Stock or Preferred Stock is that may be issued would have been at least 2.00 pursuant to 1.00 determined on a pro forma basis this clause (including a pro forma application a) by Restricted Subsidiaries that are not Borrowers or Guarantors, taken together with the principal amount of the net proceeds therefrom), as if the additional all such Indebtedness had been Incurred, or the Incurred and Disqualified Stock or Preferred Stock had been issued, as issued by Restricted Subsidiaries that are not Borrowers or Guarantors outstanding pursuant to paragraph (1) of the case may be, final proviso to clause (b)(vi) and the application final proviso to clause (b)(xxii)(x) of proceeds therefrom had occurred this Section 7.2, shall not exceed the greater of $125,000,000 and 39% of Consolidated EBITDA as of the most recently ended Reference Period at the beginning of such four-quarter periodany one time outstanding.
(b) The limitations set forth in Section 4.03(a7.2(a) shall not apply to:to (collectively, “Permitted Debt”):
(i) the Incurrence by the Company Indebtedness Incurred pursuant to this Agreement, any other Loan Document or its Restricted Subsidiaries of any Loan Note Instrument (including any Indebtedness under the Credit Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed incurred pursuant to have a principal amount equal to the face amount thereof) up to an aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such thatSection 2.25, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom2.26 or 2.28), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company Borrowers and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Senior Secured Notes issued on the Existing First-Lien Issue Closing Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Datenotes) and the guarantees thereofguarantees, as applicable (including the exchange securities and related guarantees thereof)applicable;
(aiii) Indebtedness existing on the Existing First-Lien Issue Closing Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (iSection 7.2(b)(i) and (ii)) (in the case of any individual item of Indebtedness in a principal amount in excess of $5,000,000, to be set forth on Schedule 7.2);
(iv) Permitted First Priority Refinancing Debt and Permitted Second Priority Refinancing Debt;
(v) Permitted Unsecured Refinancing Debt;
(vi) Indebtedness, Disqualified Stock or Preferred Stock (“Incremental Equivalent Debt”) not to exceed an amount equal to the sum of (x) an unlimited amount at any time so long as (A) in the case of Indebtedness that is secured by a Lien on the Collateral on a pari passu basis with the Obligations, the First Lien Net Leverage Ratio for the most recently ended Reference Period does not exceed 5.00 to 1.00, (B) in the case of Indebtedness that is secured by a Lien on the Collateral other than on a pari passu basis with the Obligations, the Secured Net Leverage Ratio for the most recently ended Reference Period does not exceed 6.50 to 1.00 or (C) in the case of Indebtedness that is unsecured or is secured by a Lien on assets that do not constitute Collateral, and in the case of Disqualified Stock or Preferred Stock, either (1) the Total Net Leverage Ratio for the most recently ended Reference Period does not exceed 6.50 to 1.00 or (2) the Interest Coverage Ratio for the most recently ended Reference Period is at least 2.00 to 1.00, in each case on a Pro Forma Basis (but without giving effect to the cash proceeds of any such Indebtedness remaining on the balance sheet and calculated assuming that any such Indebtedness is fully drawn throughout such period), plus (y) the amount of all prior voluntary prepayments, loan buybacks (with credit given to the principal amount thereof) and commitment reductions of Term Loans, Revolving Loans, Incremental Loans, Indebtedness incurred pursuant to this Section 7.2(b)(vi) that is secured by a Lien on the Collateral on a pari passu basis with the Obligations and Permitted Credit Agreement Refinancing Debt and Refinancing Indebtedness previously applied to the permanent repayment of any of the foregoing and the amount of any prepayments made to any Lender pursuant to Section 2.23, with any replacement of a Lender pursuant thereto being deemed, solely for this purpose, to constitute a prepayment (in each case, to the extent not funded with the proceeds of long-term Indebtedness (except Indebtedness under one or more revolving credit or similar facilities) or the proceeds of Permitted Cure Securities applied pursuant to Section 9.4 and, with respect to any prepayment or commitment reduction of or in respect of revolving loans, to the extent accompanied by a permanent reduction in such revolving commitments) (minus the aggregate principal amount of Indebtedness Incurred under Section 2.25(a)(i)(y)), plus (z) an amount equal to the greater of $325,000,000 and 100% of Consolidated EBITDA on a Pro Forma Basis as of the most recently ended Reference Period (and after giving effect to any acquisition or other transaction consummated concurrently therewith) (minus the aggregate outstanding principal amount of Indebtedness Incurred under Section 2.25(a)(i)(z)) (provided that, for the avoidance of doubt, the amount available to the Borrowers pursuant to clauses (y) and (z) above shall be available at all times and shall not be subject to any ratio test described in foregoing clause (x) above), which amount may be secured on a pari passu or junior basis; provided, that:
(1) the principal amount of such Indebtedness (excluding Acquired Indebtedness not Incurred in connection with or in contemplation of the applicable merger, acquisition or other similar transaction) that may be Incurred and Disqualified Stock or Preferred Stock that may be issued pursuant to this clause (vi) by Restricted Subsidiaries that are not Borrowers or Guarantors, shall not exceed the greater of $125,000,000 and 39% of Consolidated EBITDA as of the most recently ended Reference Period at any one time outstanding (minus the outstanding principal amount of such Indebtedness Incurred by Restricted Subsidiaries that are not Borrowers or Guarantors pursuant to the second proviso to clause (a) and the final proviso to clause (b)(xxii)(x) of this Section 4.03(b7.2);
(2) the Applicable Requirements shall have been satisfied;
(3) no Indebtedness under this clause (vi) may be Incurred at any time that an Event of Default has occurred and is continuing (bunless such Indebtedness is used to finance, in whole or in part, a Limited Condition Transaction, in which case the absence of an Event of Default shall be tested on the date specified in Section 1.4);
(4) any such Indebtedness in the form of Dollar denominated broadly syndicated term “B” loans Incurred under this clause (vi) that is secured by a Lien on the Collateral on a pari passu basis with the Obligations shall be subject to the MFN Provision set forth in Section 2.25(a)(vii) (giving effect to all exceptions thereto, mutatis mutandis for Incremental Equivalent Debt);
(5) [reserved];; and
(a6) (A) for the avoidance of doubt, if the applicable Borrower incurs Indebtedness under clause (x) above on the same date that it incurs Indebtedness under clauses (y) or (z) above, then the applicable incurrence ratio will be calculated with respect to such incurrence under clause (x) without regard to any incurrence of Indebtedness under clauses (y) or (z) and (B) unless the applicable Borrower elects otherwise, any Indebtedness incurred pursuant to this clause (vi) shall be deemed incurred first under clause (x) above, with the balance incurred under clauses (y) and (z) above.
(vii) Indebtedness (including including, without limitation, Capitalized Lease Obligations, mortgage financings or purchase money obligations) Incurred by the Company UK Holdco or any of its the Restricted Subsidiaries, Disqualified Stock issued by the Company UK Holdco or any of its the Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries to finance all or any part of the Company to finance (whether prior to or within 270 days after) the acquisition, purchase, lease, construction construction, design, installation, repair, replacement or improvement of property (real or personal) ), plant or equipment or other fixed or capital assets used or useful in the business of UK Holdco or the Restricted Subsidiaries or 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 amount whichamount, when aggregated with the principal amount of including all other IndebtednessIndebtedness Incurred to renew, Disqualified Stock and Preferred Stock then outstanding that was refund, Refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clause (ivvii), does not to exceed the greater of $75.0 million 150,000,000 and 5.047% of Total Assets Consolidated EBITDA as of the most recently ended Reference Period at any one time outstanding (minus amounts incurred and outstanding under clause (xvi) in respect of Indebtedness originally incurred under this clause (vii)); provided, that Capitalized Lease Obligations incurred by UK Holdco or any Restricted Subsidiary pursuant to this clause (vii) in connection with a Sale Leaseback Transaction shall not be subject to the time foregoing limitation so long as the proceeds of Incurrencesuch Sale Leaseback Transaction are used by UK Holdco or such Restricted Subsidiary to permanently repay outstanding loans under any credit agreement, debt facility or other Indebtedness secured by a Lien on the assets subject to such Sale Leaseback Transaction;
(vviii) Indebtedness Incurred by (x) in respect of any bankers’ acceptance, bank guarantees, discounted bill of exchange or the Company discounting or any factoring of its Restricted Subsidiaries receivables, warehouse receipt or similar facilities, and reinvestment obligations related thereto, entered into in the ordinary course of business and (y) 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, however, that upon the drawing of such letters of credit or the Incurrence of such Indebtedness, such obligations are reimbursed within 45 days following such drawing;
(viix) Indebtedness arising from agreements of the Company UK Holdco or a Restricted Subsidiary providing for indemnification, adjustment of purchase price price, earnout or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company UK Holdco in accordance with the terms of this IndentureAgreement, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viiix) shares of Preferred Stock of a Restricted Subsidiary issued to the Company UK Holdco 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 UK Holdco or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(a), (iv), (xiv), (xv), (xix) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Faci
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company Issuer shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Consolidated Leverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued Issuer would have been at least 2.00 less than or equal to 1.00 3.5 to 1.0 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, 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 period for which the Consolidated Leverage Ratio calculation is being performed.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company Issuer or its Restricted Subsidiaries of Indebtedness under the a 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) up to an in the aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) exceed $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.0010,000,000;
(ii) the Incurrence by any of the Company Issuer and the Guarantors of Indebtedness represented by the Securities (in the aggregate principal amount outstanding at any one time not including any Additional Securities) to exceed the Permitted Notes Amount and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees Guarantees thereof, as applicable (including the exchange securities and related guarantees thereof);
(aiii) Indebtedness and Disqualified Stock existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Issuer or any of its Restricted SubsidiariesGuarantor, and Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company Guarantor, to finance (whether prior to or within 270 days aftercontemporaneously with) the purchaseacquisition, lease, construction construction, repair, replacement or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) that (i) is without recourse to any property or assets (but no of the Issuer or any Restricted Subsidiary other material assets)) than the assets so acquired, leased, constructed, repaired, replaced or improved and (bii) Acquired Indebtedness; is in an aggregate principal amount whichthat, when aggregated with the principal amount of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence10,000,000;
(v) Indebtedness Incurred by the Company Issuer or any of its Restricted Subsidiaries (i) 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 claimsclaims or (ii) in respect of Bank Products Obligations;
(vi) Indebtedness arising from agreements of the Company Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, any assets or a Subsidiary of the Company Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; 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) shall be deemed, in each case, to be an Incurrence of such IndebtednessIndebtedness not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another Restricted Subsidiarya Guarantor; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary Guarantor that holds such shares of Preferred Stock of another a Restricted Subsidiary ceasing to be a Restricted Subsidiary Guarantor or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another Restricted Subsidiarya Guarantor) shall be deemed, in each case, to be an issuance of shares of Preferred StockStock not permitted by this clause (viii);
(ix) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee of such Guarantor, as applicableIssuer; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary of the Issuer holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary of the Issuer 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 (ix);
(x) Hedging Obligations of the Issuer or any Restricted Subsidiary entered into in the ordinary course of business that are not Incurred incurred for speculative purposes andbut: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales;
(xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal appeal, surety and surety similar bonds and completion guarantees provided by the Company Issuer or any Restricted Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(xii) Indebtedness or Disqualified Stock of the Company Issuer or any Restricted Subsidiary of the Company and Preferred Stock of any Restricted Subsidiary of the Company Guarantor not otherwise permitted hereunder under this Indenture in an aggregate principal amountamount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million 10,000,000 at any one time outstanding (it being understood that any Indebtedness Incurred under 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 CompanyIssuer, or the Restricted SubsidiaryGuarantor, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii));
(xiii) any guarantee (or co-issuance in by the case of Finance Co.) by an Issuer or a Guarantor of Indebtedness or other obligations of the Company Issuer or any of its Restricted Subsidiaries other Guarantor so long as the Incurrence of such Indebtedness Incurred by such the Issuer or such Restricted Subsidiary other Guarantor is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms unsecured and subordinated in right of payment to the Securities or the Note Guarantee of such Restricted Subsidiaryother Guarantor, 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 unsecured and subordinated in right of payment to the Securities or such Guarantor’s Note Guarantee with respect to the Securities, as applicable, Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Guarantee of such Restricted Subsidiaryother Guarantor, as applicable;
(xiv) the Incurrence by the Company Issuer or any of its Restricted Subsidiaries Guarantor of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company which Guarantor 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)(aiii), (iv), (xii), (xiv), (xv), (xix) and/or xviii), (xx) and (xxiii) of this Section 4.03(b) or any Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock, including any Indebtedness, additional Indebtedness or Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums and fees paid-in-kind interest), fees, expenses and defeasance costs in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, provided that such Refinancing Indebtedness:
(1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which that is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Indebtedness or Disqualified Stock being refunded, refinanced 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 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 Securitiesdefeased;
(2) has a Stated Maturity which that is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or and (y) 91 days following the maturity date Stated Maturity of the Securities;
(3) to the extent such Refinancing Indebtedness refunds, refinances or defeases (a) Indebtedness junior in right of payment to the Securities or the Note Guarantee of such Restricted Subsidiarya Guarantee, as applicable, such Refinancing Indebtedness is junior in right of payment to the Securities or a Guarantee to the Note Guarantee of same extent as such Restricted SubsidiaryIndebtedness being refunded, refinanced or defeased, 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 refunded, refinanced or defeased plus premiumpremium (including tender premium and paid-in-kind interest), fees fees, expenses and expenses defeasance costs Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is neither Finance Co. nor Issuer or a Guarantor that refunds, refinances Indebtedness of an Issuer or a Restricted Subsidiary that is a Guarantor, or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances defeases Indebtedness of an Unrestricted Subsidiary; and
(6) in the case of any Refinancing Indebtedness Incurred to refund, refinance or defease Indebtedness outstanding under clause (iv), (xii), (xviii) or (xixxx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv), (xii), (xviii) or (xixxx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses clause (iv), (xii), (xviii) or (xixxx) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of (ax) the Company Issuer or any of its Restricted Subsidiaries, Incurred Guarantor incurred to finance an acquisition of any property or assets or (by) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiaries Guarantor or merged merged, consolidated or amalgamated with or into the Company Issuer or a Restricted Subsidiary Guarantor in accordance with the terms of this Indenture; providedprovided that, howeverin each case, that immediately after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger, consolidation or amalgamation either:
(1) the Company Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Consolidated Leverage Ratio test set forth in the first sentence of Section 4.03(a); or
(2) the Fixed Charge Coverage Consolidated Leverage Ratio would be greater less than immediately prior to such acquisition or merger, consolidation or amalgamation; provided, further, that if, with respect to any Indebtedness incurred pursuant to this clause (xv), the Person so acquired does not become, upon acquisition, a Guarantor, then the Issuer and the Guarantors shall not guarantee such Indebtedness, and such Indebtedness shall have no recourse to any assets or property of the Issuer or the Guarantors;
(xvi) 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 Incurrence;
(xviiixvii) Indebtedness of the Company Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the a Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit, to the extent such letter of credit or bank guarantee issued pursuant to such Credit Agreement is otherwise permitted by this Section 4.03;
(xixxviii) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxixix) Indebtedness of the Company Issuer or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or premiums, (y) take-or-pay obligations contained in supply arrangementsarrangements or (z) deferred compensation or equity-based compensation to current or former officers, directors, consultants, advisors or employees thereof, in each case, in the ordinary course of business;
(xx) Indebtedness of the Issuer or any Guarantor Incurred in connection with an Investment in, or representing guarantees of Indebtedness of, joint ventures of the Issuer or any Guarantor in an aggregate principal amount, at any one time outstanding, not to exceed $1,000,000 at the time of Incurrence;
(xxi) Indebtedness of the Issuer or any Guarantor issued to (x) any joint venture (regardless of the form of legal entity) that is not a Subsidiary or (y) any Unrestricted Subsidiary, in each case arising in the ordinary course of business in connection with the cash management operations (including with respect to intercompany self-insurance arrangements) of the Issuer or any Guarantor;
(xxii) the Incurrence by the Issuer or any Guarantor of Subordinated Indebtedness that is unsecured and subordinated in right of payment to the Securities or the Guarantees (as the case may be) (excluding any such Indebtedness convertible into or exchangeable for the Capital Stock of the Issuer) with a Stated Maturity and, if applicable, a First Amortization Date no earlier than 91 days following the Stated Maturity of the Securities;
(xxiii) Capitalized Lease Obligations Incurred by the Issuer or any Guarantor in connection with a Sale/Leaseback Transaction in respect of the approximately 92,000 square foot manufacturing, laboratory and office facility in the process of being constructed at the Midlothian Biocampus near Edinburgh, Scotland, in an amount not to exceed $40,000,000 at the time of Incurrence; and
(xxiixxiv) unsecured Indebtedness of the Issuer convertible into or exchangeable for the Capital Stock of the Issuer with a Stated Maturity and, if applicable, a First Amortization Date no earlier than 91 days following the Stated Maturity of the Securities in an aggregate principal amount not to exceed $75,000,000 at any one time outstanding.
(c) Notwithstanding Section 4.03(b), Quotient Suisse or any other Swiss Obligor may not Incur any Indebtedness in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances (or, without duplication, reimbursement agreements in respect thereof) other than (i) Indebtedness issued represented by its Guarantee or (ii) unsecured Indebtedness Incurred under clause (vii) of Section 4.03(b) that is subordinated in right of payment to the Company Guarantee of Quotient Suisse or a such other Swiss Obligor, as applicable, provided that the rights of the Issuer and its Restricted Subsidiary to current or former officers, directors and employees thereof Subsidiaries (other than Quotient Suisse 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 the Company or any of its direct or indirect parent companies to the extent permitted other Swiss Obligor) under Section 4.04(b)(iv). such Indebtedness are pledged as Notes Collateral.
(d) For purposes of determining compliance with this Section 4.03, in the event that an item, item of Indebtedness or a portion of such item, taken by itself, of Indebtedness, Disqualified Stock (or Preferred Stock any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xxiixxiv) above of Section 4.03(b) or such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a), the Company Issuer shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or Disqualified Stock (or any portion thereof thereof) in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; , provided that all any Indebtedness under the First-Lien Revolving Facioutstanding u
Appears in 1 contract
Sources: Indenture (Quotient LTD)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company Holdings shall not, and shall not permit any of its the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company Holdings shall not permit any of its the Restricted Subsidiaries (other than Finance Co. or a Subsidiary Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary Holdings may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock Stock, and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock or issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company Holdings 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company Holdings or its any Restricted Subsidiaries Subsidiary of Indebtedness under the 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) up to an aggregate principal amount outstanding at any one time that does not to exceed:
exceed the greatest of (1) an amount equal to $550.0 million, (2) the greater sum of (1x) $200.0 million and (2y) 35.0% of Adjusted Consolidated Net Tangible Assets at the time of Incurrence and (3) the Borrowing Base; plus
(2) Base at the greater time of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00Incurrence;
(ii) the Incurrence by the Company Issuers and the Subsidiary Guarantors of Indebtedness represented by the Securities Notes and the Subsidiary Guarantees (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount), as applicable (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereofNotes);
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Holdings or any of its Restricted SubsidiariesSubsidiary, Disqualified Stock issued by the Company Holdings or any of its Restricted Subsidiaries Subsidiary and Preferred Stock issued by any Restricted Subsidiaries of the Company Subsidiary to finance (whether prior to or within 270 days after) the purchaseacquisition, lease, construction construction, repair, replacement or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount whichthat, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and or Preferred Stock then outstanding that was and Incurred pursuant to this clause (iv), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) below, does not exceed the greater of $75.0 million and 5.07.5% of Total Adjusted Consolidated Net Tangible Assets at the time of IncurrenceIncurrence (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount);
(v) Indebtedness Incurred by the Company Holdings 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 or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims;
(vi) Indebtedness arising from agreements of the Company Holdings or a any Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Holdings 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 Holdings and its Subsidiaries) any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Subsidiary Guarantor is subordinated in right of payment to the obligations of the Company Issuers under the SecuritiesNotes; 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 Holdings or another Restricted SubsidiarySubsidiary 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 IndebtednessIndebtedness not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company 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 Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred StockStock not permitted by this clause (viii);
(ix) Indebtedness of a Restricted Subsidiary to the Company Holdings or another Restricted Subsidiary; provided that if Finance Co. or a Subsidiary Guarantor Incurs incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not an Issuer or a Subsidiary 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 Holdings and its Subsidiaries), such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Subsidiary Guarantee of such Subsidiary 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 Holdings or another Restricted SubsidiarySubsidiary 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 IndebtednessIndebtedness not permitted by this clause (ix);
(x) Hedging Obligations that are not Incurred for speculative purposes and: but (1A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3C) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or salessales (including, without limitation, any commodity Hedging Obligation that is intended in good faith, at inception of execution, to hedge or manage any of the risks related to existing and/or forecasted Hydrocarbon production (whether or not contracted)) and, in each case, extensions or replacements thereof;
(xi) 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 Holdings or any Restricted Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(xii) Indebtedness or Disqualified Stock of the Company Holdings or any Restricted Subsidiary of the Company and Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference which, 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), together with any Refinancing Indebtedness in respect thereof Incurred pursuant to clause (xv) below, does not exceed the greater of $100.0 50.0 million and 5.0% of Adjusted Consolidated Net Tangible Assets at the time of Incurrence (plus, in the case of any one time outstanding Refinancing Indebtedness, the Additional Refinancing Amount) (it being understood that any Indebtedness Incurred under 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 CompanyHoldings, 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) Indebtedness or Disqualified Stock of Holdings or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference at any time outstanding not greater than 100.0% of the net cash proceeds received by Holdings and its Restricted Subsidiaries since immediately after the Issue Date from the issue or sale of Equity Interests of Holdings or any direct or indirect parent entity of Holdings (which proceeds are contributed to Holdings or its Restricted Subsidiary) or cash contributed to the capital of Holdings (in each case other than proceeds of Disqualified Stock or sales of Equity Interests to, or contributions received from, Holdings or any of its Subsidiaries) 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 4.04(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof);
(xiv) any guarantee (by Holdings or co-issuance in the case of Finance Co.) by an Issuer or a Guarantor any Restricted Subsidiary of Indebtedness or other obligations of the Company Holdings or any of its Restricted Subsidiaries Subsidiary so long as the Incurrence of such Indebtedness Incurred by such Issuer Holdings 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 Securities Notes or the Note Subsidiary Guarantee 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 Notes or such Guarantor’s Note Guarantee with respect to the SecuritiesSubsidiary Guarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities Notes or the Note Guarantee of such Restricted SubsidiarySubsidiary Guarantee, as applicable and (B) if such guarantee is of Indebtedness of Holdings, such guarantee is Incurred in accordance with, or not in contravention of, Section 4.11, solely to the extent Section 4.11 is applicable;
(xivxv) the Incurrence by the Company Holdings or any of its the Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company which 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)(aiii), (iv), (xivxii), (xiii), (xv), ) and (xix) and/or (xxxvi) of this Section 4.03(b) up to the outstanding principal amount (or, if applicable, the liquidation preference face amount, or the like) or, if greater, committed amount (only to the extent the committed amount could have been Incurred on the date of initial Incurrence) 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 was issued pursuant to Section 4.03(a) or clauses (ii), (iii), (iv), (xii), (xiii), (xv) and (xvi) 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 any additional 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”) prior to its respective maturity; 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 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 or refinanced that were due on or after the date that is one year following the last maturity date of any Securities Notes then outstanding were instead due on such date one year following the last date (provided that this subclause (1) will not apply to any refunding or refinancing of maturity of the Securitiesany Secured Indebtedness);
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities Notes or the Note Guarantee of such Restricted Subsidiarya Subsidiary Guarantee, as applicable, such Refinancing Indebtedness is junior to the Securities Notes or the Note Guarantee of such Restricted SubsidiarySubsidiary Guarantee, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;; and
(4) 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;
(53) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is neither Finance Co. nor not a Subsidiary Guarantor that refinances Indebtedness of an Issuer or a Restricted Subsidiary that is a Guarantor, or (y) Indebtedness of the Company an Issuer 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 (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xvxvi) Indebtedness, Disqualified Stock or Preferred Stock of (aA) the Company Holdings or any of its Restricted Subsidiaries, Subsidiary Incurred to finance an acquisition or (bB) Persons that are acquired by the Company Holdings or any of its Restricted Subsidiaries Subsidiary or merged merged, consolidated or amalgamated with or into the Company Holdings or a any Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, provided that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger, consolidation or amalgamation, either:
(1) the Company Holdings 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 of Holdings would be greater no less than immediately prior to such acquisitionacquisition or merger, consolidation or amalgamation;
(xvixvii) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company Holdings or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xviixviii) 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;
(xviiixix) Indebtedness of the Company Holdings or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit AgreementBank Indebtedness, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Restricted Subsidiaries that are not Subsidiary Guarantors and Indebtedness Incurred for working capital purposes;
(xxi) on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Company or Holdings and any Restricted Subsidiary consisting Subsidiary; provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (x) xx), when aggregated with the financing principal amount of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business; and
(xxii) all other Indebtedness issued by the Company or a Restricted Subsidiary to current or former officers, directors then outstanding 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 the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(athis clause (xx), does not exceed the Company shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item greater of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time $50.0 million and 5.0% of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving FaciAdjusted Consolidated
Appears in 1 contract
Sources: Indenture (Athlon Energy 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 Directly or indirectly, Incur 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) or and the Borrowers and the Restricted Guarantors will not issue any shares of Disqualified Stock; Stock and (ii) the Company shall will not permit any of its Restricted Subsidiaries (other than Finance Co. or Subsidiary that is not a Guarantor) Guarantor to issue any shares of Preferred Stock; provided, however, that any Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 periodStock.
(b) The limitations set forth in Section 4.03(aclause (a) shall will not apply toto the following items:
(i) the Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the Credit Agreement and Loan Documents (including any Revolving Commitment Increase) of the issuance and creation Borrowers or any of their respective Restricted Subsidiaries (including 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 outstanding at any one time not to exceed:thereunder);
(1ii) an amount equal to the greater unsecured Indebtedness, so long as (A) no Event of Default has occurred and is continuing or would result therefrom, (1) $200.0 million and (2B) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, Total Net Leverage Ratio measured on a pro forma basis after giving effect is no greater than 5.25 to 1.00 (calculated treating the incurrence cash proceeds of such Indebtedness (and application of the net proceeds therefromany other Indebtedness incurred substantially concurrently therewith as Restricted Cash), and (C) the Consolidated First-Lien Secured terms of such Indebtedness comply with the Required Debt Ratio would be no greater than 2.375 to 1.00Terms;
(iiiii) Indebtedness of the Incurrence by the Company Borrowers and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued Borrowers’ Restricted Subsidiaries in existence on the Existing First-Lien Issue Closing Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof);
(a) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (ib)(i), (ii), (xv), (xx) and (iixxi) of this Section 4.03(b)6.01) and (b) [reserved]set forth in all material respects on Schedule 6.01;
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company or any ), Disqualified Stock and Preferred Stock incurred of its their respective 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, construction lease or improvement of property (real or personal) or equipment (that is used or useful in the business of the Borrowers and Borrowers’ Restricted Subsidiaries, 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 amount whichamount, when aggregated together with the principal amount of any Refinancing Indebtedness in respect thereof and all other Indebtedness, Disqualified Stock and and/or Preferred Stock then incurred and outstanding that was Incurred pursuant to under this clause (iv), does not to exceed the greater of (x) $75.0 million 10,000,000 and 5.0(y) 1.0% of Consolidated Total Assets at any time outstanding; so long as such Indebtedness exists at the time date of Incurrencesuch purchase, lease or improvement, or is created within 270 days thereafter;
(v) Indebtedness Incurred incurred by the Company Borrowers or any of its their respective Restricted Subsidiaries constituting reimbursement obligations with in respect to of letters of credit and credit, bank guarantees guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including without limitation letters of credit in respect of workers’ workers compensation claims, health, disability or other employee 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, insurance or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ workers compensation claims;
(vi) Indebtedness arising from agreements of the Company a Borrower or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred incurred or assumed in connection with the Transactions or any acquisition or disposition Disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenturesubsidiary, other than guarantees of Indebtedness Incurred incurred by any Person acquiring all or any portion of such business, assets or Subsidiary a subsidiary for the purpose of financing such acquisition; provided, however, that such Indebtedness is not reflected on the balance sheet (other than by application of Interpretation Number 45 of the Financial Accounting Standards Board (commonly known as FIN 45) as a result of an amendment to an obligation in existence on the Closing Date) of any Borrower or Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (vi));
(vii) Indebtedness of the Company (A) any Borrower to a any Restricted Subsidiary and (B) any Restricted Subsidiary to any Borrower or to any other Restricted Subsidiary; provided that any such Indebtedness owed owing by a Borrower or a Guarantor to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor is subordinated in right of payment to the obligations of the Company under the SecuritiesSubordinated Indebtedness; 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 a Borrower 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 clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to a Borrower or another Restricted Subsidiary, provided, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any 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 a Borrower or another a Restricted Subsidiary) shall be deemed, deemed in each case, case to be an issuance of such shares of Preferred StockStock not permitted by this clause (viii);
(ix) 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 neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred (excluding Hedging Obligations entered into for speculative purposes and: (1purposes) for the purpose of fixing or hedging limiting interest rate risk with respect to any Indebtedness that is permitted by the terms of under this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency Section 6.01, exchange rate risk with respect to any currency exchanges; and/or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or salespricing risk;
(xix) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of customs, stay, performance, bid, appeal and surety bonds and performance and completion guarantees and other obligations of a like nature provided by the Company Borrowers or any of their respective Restricted Subsidiary Subsidiaries in the ordinary course of business;
(xi) [Reserved];
(xii) Indebtedness provided that no Event of Default shall have occurred and be continuing or Disqualified Stock of would occur as a consequence thereof, the Company incurrence by any Borrower or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which serves to refundrefund or refinance any Indebtedness, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(a) and clauses (ii), (iii)(aiii), (iv), (xivxiii), (xv), (xix) and/or xviii), (xx) or (xxvi) of this Section 4.03(b6.01(b) or any Indebtedness, Disqualified Stock or Preferred Stock Incurred issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any including, in each case, additional Indebtedness, Disqualified Stock or Preferred Stock Incurred incurred to pay premiums (including tender premiums), defeasance costs and fees and expenses in connection therewith (subject to collectively, the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(1A) 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 the 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 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;refinanced,
(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 (y) 91 days following the maturity date of the Securities;
(3B) to the extent such Refinancing Indebtedness refinances (a1) Indebtedness junior subordinated or pari passu to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicableObligations, such Refinancing Indebtedness is junior subordinated or pari passu to the Securities Obligations at least to the same extent as the Indebtedness being refinanced or the Note Guarantee of such Restricted Subsidiary, as applicable, or refunded and (b2) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is must be Disqualified Stock or Preferred Stock;, respectively,
(4) 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;
(5C) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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; andinclude:
(6) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 Guarantor 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 the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 refinances Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one any Borrower;
(2) Indebtedness, Disqualified Stock or Preferred Stock of the categories a Restricted Subsidiary that is not a Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock 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 4.03(a), the Company shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03a Restricted Guarantor; provided that all Indebtedness under the First-Lien Revolving Facior
Appears in 1 contract
Sources: Revolving Loan Credit Agreement (ConvergeOne Holdings, 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, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer the Company and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the 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) up to an aggregate principal amount of $770.0 million outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00time;
(ii) the Incurrence by the Company Issuers and the Guarantors of Indebtedness represented by (x) the Original Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofGuarantees, as applicable (including the Exchange Securities and guarantees thereof) and (y) the Second Lien Notes issued on the Issue Date and the related guarantees thereof (including exchange securities Second Lien Notes and related guarantees thereof);
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(a) Indebtedness (including Capitalized Lease Obligations) 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, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs incurs such Indebtedness to a Restricted Subsidiary that is neither not Finance Co. nor or a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred incurred for speculative purposes andand either: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(aiii), (iv), (xiv), (xv), (xix) and/or and (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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the last maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness equal to or junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior equal to or junior, as applicable, to the Securities 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer the Company or a Restricted Subsidiary that is an Issuer or 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xixxx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (32) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;Indebtedness.
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; 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 pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;; and
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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, 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 (xxiixxi) above or such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a), the Company Issuers shall, in its their sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving FaciCredit 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 any portion of such Indebtedness 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 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.
Appears in 1 contract
Sources: Indenture (Verso Sartell LLC)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) None of the Issuers or the Guarantors will, incur, create, assume or permit to exist any Indebtedness, except (i) The Company shall notIndebtedness created hereunder and under the other Notes Documents (but excluding any Additional Notes), and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) Indebtedness outstanding under the Company shall Exchange Offer Notes and guarantees thereof, (iii) during the 90 day period preceding the maturity of the PIK Toggle Notes, Indebtedness in the form of Additional Notes issued hereunder or Exchange Offer Additional Notes issued under the Exchange Offer Indenture not permit to exceed an aggregate principal amount (the “Additional Debt Amount”) such that, after giving regard to any original issue discount thereon not in excess of 25%, would result in proceeds to the Issuers equal to the sum of (x) the aggregate principal amount of the PIK Toggle Notes immediately outstanding following the consummation of the Exchange Offer (excluding the Purchased PIK Toggle Notes) plus (y) all accreted interest thereon through the maturity date thereof pursuant to the terms thereof as in effect on the Issue Date plus (z) an amount equal to the Additional Notes Payment, and (iv) with respect to any of its Restricted Subsidiaries the foregoing clauses (other than Finance Co. or a Guarantori) through (iii), any Permitted Refinancing Indebtedness incurred to issue any shares of Preferred StockRefinance such Indebtedness (“Permitted Indebtedness”); provided, however, that any Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of Issuers shall distribute the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the 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) up to an aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof);
(a) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved];
(a) Indebtedness (including Capitalized Lease Obligations) 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, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) 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 neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(a), (iv), (xiv), (xv), (xix) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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 Payment on or promptly after the date one year following the last maturity date of incurrence of any Securities then outstanding were instead due on such date one year following the last date of maturity Indebtedness pursuant to clause (iii) hereof, in cash, as a premium, pro rata among all holders of the Securities;
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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notesexcluding, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
practicable, any Additional Notes) and any Exchange Offer Notes (xv) Indebtednessexcluding, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). For purposes practicable, any Exchange Offer Additional Notes) as of determining compliance with this Section 4.03, in the event that an item, or a portion date 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 4.03(a), the Company shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Faciincurrence.
Appears in 1 contract
Sources: Indenture (J Crew Group Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Holdings and the Company shall not, and shall not permit any of its the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; Stock and (ii) the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:to (collectively, “Permitted Debt”):
(i) the Incurrence by the Company Holdings or its Restricted Subsidiaries of Indebtedness under the 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) up to an aggregate principal amount not to exceed $368.0 million outstanding at any one time not to exceed:
(1) an amount equal to time, less the greater sum of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater amounts of (x) $50.0 million all permanent reductions of Indebtedness thereunder as a result of principal payments actually made (A) with Net Cash Proceeds from Asset Sales, (B) as Amortization Payments and (C) under excess cash flow mandatory prepayment provisions under the Credit Agreement plus (y) an amount such that, on all permanent reductions in revolving credit commitments under the Credit Agreement other than in connection with a pro forma basis after giving effect to the incurrence of such Indebtedness (and application substantially concurrent refinancing or replacement of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00amount so reduced;
(ii) the Incurrence by Holdings, the Company and the Subsidiary Guarantors of Indebtedness represented by the Securities Notes (not including PIK Notes and any Additional Securitiesincreased principal amount of Notes as payment for PIK Interest) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofGuarantees, as applicable (including the exchange securities and related guarantees thereof)applicable;
(aA) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i), (ii) and subclause (iiB) of this clause (iii) of this Section 4.03(b)), including without limitation any Existing Notes (and guarantees thereof) that remain outstanding on the Issue Date after giving effect to the Refinancing Transactions (provided that with respect to any such Indebtedness, other than any Existing Notes, in excess of $1.0 million individually and $5.0 million in the aggregate, such Indebtedness is listed on Schedule III); and (bB) [reserved]the Cerberus 3L Notes (and guarantees thereof) in a principal amount not to exceed the sum of (x) $30.0 million plus for the avoidance of doubt (y) any increases in the principal amount of the Cerberus 3L Notes as a result of the payment of payment in kind interest in respect thereof;
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Holdings or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company Holdings 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, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount whichamount, when aggregated with the principal amount of including all other IndebtednessIndebtedness Incurred to renew, Disqualified Stock and Preferred Stock then outstanding that was refund, refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clause (iv), does not to exceed the greater of (x) $75.0 15.0 million and 5.0(y) 0.75% of Total Assets at the time of Incurrence, at any one time outstanding;
(v) Indebtedness Incurred by the Company Holdings 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 limitation, letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits to employees (whether current or former employees or their families former) 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 reimbursement-type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing;
(vi) Indebtedness arising from agreements of the Company Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company Holdings in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Holdings to a Restricted Subsidiary; provided that any such Indebtedness owed to shall be Subordinated Indebtedness and either unsecured or, if secured, secured by a Restricted Subsidiary Lien that is neither Finance Co. nor a Guarantor is subordinated junior in right of payment priority to the obligations of Lien securing the Company under the SecuritiesPermitted Second Lien Obligations; provided, further, and provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, case to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company Holdings or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 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 (and not Incurred for speculative purposes andpurposes) not to exceed $20.0 million at any one time outstanding: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or salespurchases;
(xi) 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 Holdings or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company Holdings or any Restricted Subsidiary of the Company Holdings and Preferred Stock of any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference which, 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 $100.0 15.0 million at any one time outstanding (it being understood outstanding; provided, however, that notwithstanding the foregoing provision, any Unsecured Indebtedness that is pari passu with the Notes in right of payment, or any Secured Indebtedness that is secured with a Lien on the Collateral on a pari passu basis with the Lien securing the Notes Incurred under this clause (xii) shall cease may not exceed $5.0 million at any one time outstanding, and provided further that no Indebtedness that is senior to the Notes in right of payment or is Secured Indebtedness that is secured with a Lien on the Collateral having a senior priority to the Lien securing the Notes may be deemed Incurred or outstanding for purposes of incurred under 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 (or co-issuance in the case of Finance Co.) by an Issuer Holdings or a Guarantor Restricted Subsidiary of Indebtedness or other obligations of the Company Holdings or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred or other obligations by such Issuer 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 Notes or the Note Guarantee 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 Guarantee with respect to the Securities, as applicable, Notes substantially to the same extent as such Indebtedness is subordinated to the Securities Notes or the Note Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company Holdings or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company Holdings which serves to refund, refinance or defease any Indebtedness Incurred or Indebtedness, Disqualified Stock or Preferred Stock issued Incurred as permitted under Section 4.03(a) and clauses (ii), (iii)(aiii)(A), (iv), this clause (xiv), (xv), (xix) and/or xviii), (xx) and (xxii) 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 any additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums premiums, 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:
(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 Indebtedness 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 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 Securitiesrefinanced;
(2) has a Stated Maturity which is not no 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 Securitiesrefinanced;
(3) to the extent such Refinancing Indebtedness refinances (ax) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicableSubordinated Indebtedness, such Refinancing Indebtedness is junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, also constitutes Subordinated Indebtedness or (by) 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 sum of (x) the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus (y) the amount of premium, fees and expenses Incurred in connection with such refinancing;; and
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of Holdings that is not the Company that is neither Finance Co. nor or a Guarantor that refinances Indebtedness of an Issuer Holdings, the Company or a Restricted Subsidiary that is a Guarantor, Guarantor or (y) Indebtedness of the Company Holdings or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(6) in the case of and provided further that any Refinancing Indebtedness Incurred incurred with respect to refinance Indebtedness Existing Notes that remain outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of on the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, Issue Date after giving effect to the extent such refunding or refinancing occurs within one year of Refinancing Transactions must also be Subordinated Indebtedness and otherwise comply with the Stated Maturity thereofprovisions relating to the Existing Notes under Section 4.04(b)(iii);
(xv) Indebtedness, Disqualified Stock or Preferred Stock Stock, not to exceed $30.0 million at any one time outstanding, (x) of (a) the Company Holdings or any of its Restricted Subsidiaries, Subsidiaries Incurred to finance an acquisition or and (by) of Persons that are acquired by the Company Holdings or any of its Restricted Subsidiaries or merged or amalgamated into the Company Holdings or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness Indebtedness, Disqualified Stock or Preferred Stock, 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 of Holdings and its Subsidiaries on a consolidated basis for the first sentence most recently ended four full fiscal quarters for which financial statements are available immediately preceding the date of Section 4.03(asuch acquisition 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 period; or
(2) the Fixed Charge Coverage Ratio of Holdings and its Subsidiaries on a consolidated basis after giving pro forma effect to such acquisition for the most recently ended four full fiscal quarters for which financial statements are available immediately preceding the date of such acquisition would be greater than immediately prior to such acquisition; provided further, however, that (A) any such Indebtedness has a Stated Maturity at least six months later than the Stated Maturity of the Notes and (B) any such Indebtedness of Holdings, the Company or a Guarantor shall either be Unsecured Indebtedness or Secured Indebtedness that is secured with a Lien on the Collateral on a junior basis to the Lien securing the Notes;
(xvi) 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 Incurrence;
(xviiixvii) Indebtedness of the Company Holdings or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of creditcredit or bank guarantee;
(xixxviii) Contribution Indebtedness;
(xxxix) Indebtedness in an aggregate amount not to exceed $25.0 million at any one time outstanding of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) Indebtedness of the Company Holdings or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in the case of each caseof clauses (x) and (y), in the ordinary course of businessbusiness and on an unsecured basis;
(xx) Indebtedness of Foreign Subsidiaries of Holdings in an aggregate amount not to exceed $10.0 million at any one time outstanding;
(xxi) [reserved]; and
(xxii) Indebtedness issued under the Foreign L/C Facility in an aggregate principal amount not to exceed $30.0 million at any time outstanding; provided that such Indebtedness may be recourse to Holdings, but shall not be secured by a Lien on the Company or a Restricted Subsidiary to current or former officersassets of Holdings, 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 the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). Subsidiary Guarantor.
(c) 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, 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 described in clauses (i) through (xxii) above Permitted Debt or such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a), the Company shall, in its sole discretion, at the time of Incurrence, divide, classify or reclassify, or at any later time divide, classify or reclassify, such item of Indebtedness Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof thereof) in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving FaciCredit Agreement outstanding on the Issue Date shall be deemed to have been Incurred pursuant to clause (i) of Section 4.03(b) and all Indebtedness under the Cerberus 3L Notes outstanding on the Issue Date shall be deemed to have been Incurred pursuant to clause (iii)(B) 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 Disqualified Stock or Preferred Stock in the form of additional shares of Disqualified Stock or Preferred Stock of the same class, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be deemed to be
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, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the 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) up to an aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-First- Lien Issue Date) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof);
(a) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved];
(a) Indebtedness (including Capitalized Lease Obligations) 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, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and and
(b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) 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 neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(a), (iv), (xiv), (xv), (xix) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Faciclause
Appears in 1 contract
Sources: Merger Agreement
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuers will not
(i) The Company shall not, and shall will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and and
(ii) the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) Subsidiary to issue any shares of Preferred Stock; provided, however, that any Issuer the Issuers and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case case, if the Fixed Charge Coverage Debt to EBITDA Ratio of the Company for Issuers at the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding time of such Incurrence or issuance, as the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued case may be, would have been at least 2.00 less than or equal to 1.00 6.00 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 periodthe most recently ended four full fiscal quarters for which internal financial statements are available.
(b) The limitations set forth in Section 4.03(a4.10(a) shall will not apply to:
(i) the Incurrence by the Company Issuers or its the Restricted Subsidiaries of Indebtedness under the Credit Agreement Agreement, including any Indebtedness outstanding on the Issue Date, and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate principal amount of $925.0 million outstanding at any one time not time, less (A) the amount of all mandatory principal payments required to exceed:
(1) an amount equal to be made by the greater borrower thereunder with the Net Proceeds of (1) $200.0 million Asset Sales and (2B) the Borrowing Base; plus
amount of any Refinancing Indebtedness Incurred pursuant to clause (2xiv) to refinance Indebtedness under the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00Credit Agreement;
(ii) the Incurrence by the Company Issuers and the any Guarantors of Indebtedness represented by the Securities Notes (not including any Additional SecuritiesNotes) and the Existing First-Lien any Guarantees, if applicable, and any Exchange Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof);
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(babove)) and (b) [reserved];
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Issuers 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 Subsidiary to finance (whether prior to or within 270 days after) the purchase, lease, construction lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock Indebtedness then outstanding that was and Incurred pursuant to this clause (iv), does not exceed the greater of (x) $75.0 50.0 million and 5.0(y) 2.5% of Total Assets at the time of IncurrenceAssets;
(v) Indebtedness Incurred by the Company Issuers 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 employee 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, however, that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing;
(vi) Indebtedness arising from agreements of the Company Issuers (taken together) or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, case Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company Issuers in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Issuers to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the SecuritiesNotes; 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 Issuers 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 an 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 Subsidiary, or any other subsequent transfer of any such shares of Preferred Stock (except to the Company an Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company Issuers (taken together) or another Restricted Subsidiary; provided that (A) any such Indebtedness is made pursuant to an intercompany note and (B) to the extent applicable, if Finance Co. or a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee of such Guarantor, as applicable; provided, further, provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding lending such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company an Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
business (xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(a), (iv), (xiv), (xv), (xix) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital speculative purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Faci):
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, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the 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) up to an aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1x) $200.0 million and (2y) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 3.00 to 1.00;
(ii) the Incurrence by the Company and the Guarantors of Indebtedness represented by the Original Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofNote Guarantees, as applicable (including the exchange securities Exchange Securities and related guarantees thereof);
(a1) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b2) [reserved]Indebtedness under the 2019 First-Lien Notes outstanding on the Issue Date;
(aiv) (1) Indebtedness (including Capitalized Lease Obligations) 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, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b2) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) 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 neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(aiii), (iv), (xiv), (xv), (xix) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (ax) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, or (by) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;
(4) 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (aA) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (bB) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving FaciFacility or ABL Facility 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
Appears in 1 contract
Sources: Indenture (Verso Paper Corp.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company shall UK Holdco will not, and shall will not permit any of its the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall UK Holdco will not permit any of its the Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer UK Holdco and any of the Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary Subsidiaries may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any of the Restricted Subsidiary Subsidiaries may issue shares of Preferred Stock, in each case case, if either (A) the Fixed Charge Interest Coverage Ratio of the Company for the most recently ended four full fiscal quarters Reference Period is at least 2.00 to 1.00 or (B) the Total Net Leverage Ratio for which internal financial statements are available immediately preceding the date most recently ended Reference Period does not exceed 6.50 to 1.00 (any such debt incurred pursuant to this proviso, “Ratio Debt”), in each case determined on which such additional a Pro Forma Basis; provided, further, however, that the aggregate principal amount of Indebtedness is (excluding Acquired Indebtedness not Incurred in connection with or such in contemplation of the applicable merger, acquisition or other similar transaction) that may be Incurred and Disqualified Stock or Preferred Stock is that may be issued would have been at least 2.00 pursuant to 1.00 determined on a pro forma basis this clause (including a pro forma application a) by Restricted Subsidiaries that are not Borrowers or Guarantors, taken together with the principal amount of the net proceeds therefrom), as if the additional all such Indebtedness had been Incurred, or the Incurred and Disqualified Stock or Preferred Stock had been issued, as issued by Restricted Subsidiaries that are not Borrowers or Guarantors outstanding pursuant to paragraph (1) of the case may be, final proviso to clause (b)(vi) and the application final proviso to clause (b)(xxii)(x) of proceeds therefrom had occurred this Section 7.2, shall not exceed the greater of $125,000,000 and 39% of Consolidated EBITDA as of the most recently ended Reference Period at the beginning of such four-quarter periodany one time outstanding.
(b) The limitations set forth in Section 4.03(a7.2(a) shall not apply to:to (collectively, “Permitted Debt”):
(i) the Incurrence by the Company Indebtedness Incurred pursuant to this Agreement, any other Loan Document or its Restricted Subsidiaries of any Loan Note Instrument (including any Indebtedness under the Credit Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed incurred pursuant to have a principal amount equal to the face amount thereof) up to an aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such thatSection 2.25, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom2.26 or 2.28), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company Borrowers and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Senior Secured Notes issued on the Existing First-Lien Issue Closing Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Datenotes) and the guarantees thereofguarantees, as applicable (including the exchange securities and related guarantees thereof)applicable;
(aiii) Indebtedness existing on the Existing First-Lien Issue Closing Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (iSection 7.2(b)(i) and (ii)) (in the case of any individual item of Indebtedness in a principal amount in excess of $5,000,000, to be set forth on Schedule 7.2);
(iv) Permitted First Priority Refinancing Debt and Permitted Second Priority Refinancing Debt;
(v) Permitted Unsecured Refinancing Debt;
(vi) Indebtedness, Disqualified Stock or Preferred Stock (“Incremental Equivalent Debt”) not to exceed an amount equal to the sum of (x) an unlimited amount at any time so long as (A) in the case of Indebtedness that is secured by a Lien on the Collateral on a pari passu basis with the Obligations, the First Lien Net Leverage Ratio for the most recently ended Reference Period does not exceed 5.00 to 1.00, (B) in the case of Indebtedness that is secured by a Lien on the Collateral other than on a pari passu basis with the Obligations, the Secured Net Leverage Ratio for the most recently ended Reference Period does not exceed 6.50 to 1.00 or (C) in the case of Indebtedness that is unsecured or is secured by a Lien on assets that do not constitute Collateral, and in the case of Disqualified Stock or Preferred Stock, either (1) the Total Net Leverage Ratio for the most recently ended Reference Period does not exceed 6.50 to 1.00 or (2) the Interest Coverage Ratio for the most recently ended Reference Period is at least 2.00 to 1.00, in each case on a Pro Forma Basis (but without giving effect to the cash proceeds of any such Indebtedness remaining on the balance sheet and calculated assuming that any such Indebtedness is fully drawn throughout such period), plus (y) the amount of all prior voluntary prepayments, loan buybacks (with credit given to the principal amount thereof) and commitment reductions of Term Loans, Revolving Loans, Incremental Loans, Indebtedness incurred pursuant to this Section 7.2(b)(vi) that is secured by a Lien on the Collateral on a pari passu basis with the Obligations and Permitted Credit Agreement Refinancing Debt and Refinancing Indebtedness previously applied to the permanent repayment of any of the foregoing and the amount of any prepayments made to any Lender pursuant to Section 2.23, with any replacement of a Lender pursuant thereto being deemed, solely for this purpose, to constitute a prepayment (in each case, to the extent not funded with the proceeds of long-term Indebtedness (except Indebtedness under one or more revolving credit or similar facilities) or the proceeds of Permitted Cure Securities applied pursuant to Section 9.4 and, with respect to any prepayment or commitment reduction of or in respect of revolving loans, to the extent accompanied by a permanent reduction in such revolving commitments) (minus the aggregate principal amount of Indebtedness Incurred under Section 2.25(a)(i)(y)), plus (z) an amount equal to the greater of $325,000,000 and 100% of Consolidated EBITDA on a Pro Forma Basis as of the most recently ended Reference Period (and after giving effect to any acquisition or other transaction consummated concurrently therewith) (minus the aggregate outstanding principal amount of Indebtedness Incurred under Section 2.25(a)(i)(z)) (provided that, for the avoidance of doubt, the amount available to the Borrowers pursuant to clauses (y) and (z) above shall be available at all times and shall not be subject to any ratio test described in foregoing clause (x) above), which amount may be secured on a pari passu or junior basis; provided, that:
(1) the principal amount of such Indebtedness (excluding Acquired Indebtedness not Incurred in connection with or in contemplation of the applicable merger, acquisition or other similar transaction) that may be Incurred and Disqualified Stock or Preferred Stock that may be issued pursuant to this clause (vi) by Restricted Subsidiaries that are not Borrowers or Guarantors, shall not exceed the greater of $125,000,000 and 39% of Consolidated EBITDA as of the most recently ended Reference Period at any one time outstanding (minus the outstanding principal amount of such Indebtedness Incurred by Restricted Subsidiaries that are not Borrowers or Guarantors pursuant to the second proviso to clause (a) and the final proviso to clause (b)(xxii)(x) of this Section 4.03(b7.2);
(2) the Applicable Requirements shall have been satisfied;
(3) no Indebtedness under this clause (vi) may be Incurred at any time that an Event of Default has occurred and is continuing (bunless such Indebtedness is used to finance, in whole or in part, a Limited Condition Transaction, in which case the absence of an Event of Default shall be tested on the date specified in Section 1.4);
(4) any such Indebtedness in the form of Dollar denominated broadly syndicated term “B” loans Incurred under this clause (vi) that is secured by a Lien on the Collateral on a pari passu basis with the Obligations shall be subject to the MFN Provision set forth in Section 2.25(a)(vii) (giving effect to all exceptions thereto, mutatis mutandis for Incremental Equivalent Debt);
(5) [reserved];; and
(a6) (A) for the avoidance of doubt, if the applicable Borrower incurs Indebtedness under clause (x) above on the same date that it incurs Indebtedness under clauses (y) or (z) above, then the applicable incurrence ratio will be calculated with respect to such incurrence under clause (x) without regard to any incurrence of Indebtedness under clauses (y) or (z) and (B) unless the applicable Borrower elects otherwise, any Indebtedness incurred pursuant to this clause (vi) shall be deemed incurred first under clause (x) above, with the balance incurred under clauses (y) and (z) above.
(vii) Indebtedness (including including, without limitation, Capitalized Lease Obligations, mortgage financings or purchase money obligations) Incurred by the Company UK Holdco or any of its the Restricted Subsidiaries, Disqualified Stock issued by the Company UK Holdco or any of its the Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries to finance all or any part of the Company to finance (whether prior to or within 270 days after) the acquisition, purchase, lease, construction construction, design, installation, repair, replacement or improvement of property (real or personal) ), plant or equipment or other fixed or capital assets used or useful in the business of UK Holdco or the Restricted Subsidiaries or 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 amount whichamount, when aggregated with the principal amount of including all other IndebtednessIndebtedness Incurred to renew, Disqualified Stock and Preferred Stock then outstanding that was refund, Refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clause (ivvii), does not to exceed the greater of $75.0 million 150,000,000 and 5.047% of Total Assets Consolidated EBITDA as of the most recently ended Reference Period at any one time outstanding (minus amounts incurred and outstanding under clause (xvi) in respect of Indebtedness originally incurred under this clause (vii)); provided, that Capitalized Lease Obligations incurred by UK Holdco or any Restricted Subsidiary pursuant to this clause (vii) in connection with a Sale Leaseback Transaction shall not be subject to the time foregoing limitation so long as the proceeds of Incurrencesuch Sale Leaseback Transaction are used by UK Holdco or such Restricted Subsidiary to permanently repay outstanding loans under any credit agreement, debt facility or other Indebtedness secured by a Lien on the assets subject to such Sale Leaseback Transaction;
(vviii) Indebtedness Incurred by (x) in respect of any bankers’ acceptance, bank guarantees, discounted b▇▇▇ of exchange or the Company discounting or any factoring of its Restricted Subsidiaries receivables, warehouse receipt or similar facilities, and reinvestment obligations related thereto, entered into in the ordinary course of business and (y) 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, however, that upon the drawing of such letters of credit or the Incurrence of such Indebtedness, such obligations are reimbursed within 45 days following such drawing;
(viix) Indebtedness arising from agreements of the Company UK Holdco or a Restricted Subsidiary providing for indemnification, adjustment of purchase price price, earnout or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company UK Holdco in accordance with the terms of this IndentureAgreement, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viiix) shares of Preferred Stock of a Restricted Subsidiary issued to the Company UK Holdco 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 UK Holdco or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(a), (iv), (xiv), (xv), (xix) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Faci
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company shall Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; Stock and (ii) the Company shall Issuer will not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio Ratio, calculated as of the Company 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 or such Disqualified Stock or Preferred Stock is issued and determined on a Pro Forma Basis for the Incurrence (including the use of proceeds thereof) and any related transactions, would have been at least be equal to or greater than 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom)any such Indebtedness, as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issuedStock, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period“Ratio Debt”).
(b) The foregoing limitations set forth in Section 4.03(a) shall will not apply to:to (collectively, “Permitted Debt”):
(i) the Incurrence by the Company Issuer or its Restricted Subsidiaries of Indebtedness under any Credit Agreement, the Credit Agreement 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 the sum of (I) an aggregate outstanding principal amount outstanding at any one time not to exceed:
(1) an amount equal to exceed the greater sum of (1x) $200.0 2,250.0 million and plus (2) the Borrowing Base; plus
(2y) the greater of (A) $754.0 million and (B) 100.0% of Four Quarter EBITDA, at any one time outstanding, plus (II) an additional aggregate principal amount which, after giving Pro Forma Effect to such Incurrence (including the use of proceeds thereof) and any related transactions (or, at the Issuer’s option, on the date of the initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause), would not cause the Consolidated Senior Secured Net Debt Ratio to exceed 3.50 to 1.00; provided that (x) $50.0 million any Indebtedness Incurred under clause (I) of this clause (i) on the date of determination of the Consolidated Senior Secured Net Debt Ratio shall be excluded in the calculation of the Consolidated Senior Secured Net Debt Ratio under clause (II) of this clause (i) on such date but not, for the avoidance of doubt, excluded from any such calculation made on any subsequent date and (y) an amount such thatany Indebtedness Incurred under clause (II) of this clause (i) shall be deemed to be Secured Indebtedness, on a pro forma basis after giving effect to the incurrence whether or not so secured, solely for purposes of such Indebtedness (and application of the net proceeds therefrom), calculating the Consolidated First-Lien Senior Secured Net Debt Ratio would be no greater than 2.375 to 1.00in connection with the Incurrence thereof;
(ii) the Incurrence by the Company Issuer and the Guarantors of Indebtedness represented by the Securities Notes (not including any Additional SecuritiesNotes) and the Existing First-Lien Notes issued Guarantees thereof;
(iii) Indebtedness of the Issuer and its Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) on the Existing First-Lien Issue Date (not including any additional Existing First-Lien other than Indebtedness under the Senior Credit Agreement Incurred under clause (i) above or in respect of the Initial Notes issued after the Existing First-Lien Issue DateIncurred under clause (ii) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereofabove);
(a) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved];
(aiv) Indebtedness (including Capitalized Lease ObligationsObligations and mortgage financings as purchase money obligations) Incurred by the Company Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company Issuer to finance (whether prior to all or within 270 days after) any part of the purchase, lease, construction construction, installation, repair or improvement of property (real or personal) ), plant or equipment or other fixed or capital assets (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 amount whichor liquidation preference, when aggregated with the principal amount of including all other Indebtedness, Indebtedness Incurred and Disqualified Stock and or Preferred Stock then outstanding that was issued to Refinance any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), does not to exceed the greater of (a) $75.0 207.0 million and 5.0(b) 27.5% of Total Assets Four Quarter EBITDA, at the any one time of Incurrenceoutstanding;
(v) Indebtedness Incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and or bank guarantees or similar instruments issued in the ordinary course of business, including including, without limitation limitation, (i) letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits to employees (whether current or former employees or their families former) 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 reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and (ii) guarantees of Indebtedness Incurred by customers in connection with the purchase or other acquisition of equipment or supplies in the ordinary course of business;
(vi) Indebtedness Indebtedness, Disqualified Stock or Preferred Stock arising from agreements of the Company Issuer or a its Restricted Subsidiary Subsidiaries providing for indemnification, earn-outs, adjustment of purchase price or acquisition price, incentive, non-compete, consulting or similar obligations and other contingent obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a assets, Subsidiary of the Company Issuer or other Investment in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness or Disqualified Stock of the Company Issuer to a Restricted Subsidiary; provided that any (x) such Indebtedness owed or Disqualified Stock owing to a Restricted Non-Guarantor Subsidiary that is neither Finance Co. nor a Guarantor is shall be subordinated in right of payment to the obligations of Issuer’s Obligations with respect to the Company under the Securities; provided, further, that Notes and (y) 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 or Disqualified Stock (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such IndebtednessIndebtedness or Disqualified Stock not permitted by this clause (vii);
(viii) 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 Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred StockStock not permitted by this clause (viii);
(ix) Indebtedness Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary owing to the Company Issuer or another Restricted Subsidiary; provided that (x) if Finance Co. or a Guarantor Incurs such Indebtedness Indebtedness, Disqualified Stock or Preferred Stock owing to a Restricted Subsidiary that is neither Finance Co. nor a Non-Guarantor Subsidiary, such Indebtedness Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee of such Guarantor, as applicable; provided, further, that Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary holding lending such Indebtedness Indebtedness, Disqualified Stock or Preferred Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness Indebtedness, Disqualified Stock or Preferred Stock (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(a), (iv), (xiv), (xv), (xix) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not permitted by this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 Undertakingsix);
(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 the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Faci
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company Issuer shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Note Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Note Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company Issuer 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 or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 determined on a pro forma basis (including including
(b) 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.
(bc) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company Issuer or its Restricted Subsidiaries of Secured Indebtedness under the Credit Agreement 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) up to in the aggregate principal amount of $1,600.0 million plus an aggregate additional principal amount outstanding at any one time that does not cause the Secured Indebtedness Leverage Ratio of the Issuer to exceed:
(1) an amount equal exceed 4.00 to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that1.00, determined on a pro forma basis after giving effect to the incurrence of such Indebtedness (and including a pro forma application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company Issuer and the Note Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofGuarantees, as applicable (including the exchange securities Exchange Securities and related guarantees thereof);
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company Issuer to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Company Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Note Guarantor is subordinated in right of payment to the obligations of the Company Issuer under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) 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 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 shares
(ix) of Preferred Stock (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ixx) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that if Finance Co. or a Note Guarantor Incurs incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor Note Guarantor, such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee of such Note 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 Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(xxi) Hedging Obligations that are not Incurred incurred for speculative purposes andand either: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk (including resin price risk) with respect to any commodity purchases or sales;
(xixii) 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 Restricted Subsidiary in the ordinary course of business;
(xiixiii) Indebtedness or Disqualified Stock of the Company Issuer or any Restricted Subsidiary of the Company Issuer and Preferred Stock of any Restricted Subsidiary of the Company Issuer not otherwise permitted hereunder in an aggregate principal amountamount which, 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 $100.0 million and 4.5% of Total Assets at any one the time outstanding 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 CompanyIssuer, 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));
(xiiixiv) any guarantee (or co-issuance in by the case of Finance Co.) by an Issuer or a Note Guarantor of Indebtedness or other obligations of the Company Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by such 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 Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, any such guarantee (or co-issuance in the case of Finance Co.) of such Issuer or such Note Guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Securities or such Note Guarantor’s Note Guarantee with respect to the Securities, as applicable, Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable;
(xivxv) the Incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company Issuer which 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)(aiii), (iv), (xiv), (xv), (xix) and/or and (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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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 Securitiesrefinanced;
(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 (y) 91 days following the last maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 Issuer that is neither Finance Co. nor not a Note Guarantor that refinances Indebtedness of an the Issuer or a Restricted Subsidiary that is a Note Guarantor, or (y) Indebtedness of the Company Issuer 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 (xixxx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xixxx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or and (xixxx) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (32) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-First Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereofObligations;
(xvxvi) Indebtedness, Disqualified Stock or Preferred Stock of (ax) the Company Issuer or any of its Restricted Subsidiaries, Incurred Subsidiaries incurred to finance an acquisition or (by) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiaries or merged with or amalgamated into the Company Issuer or a any of its Restricted Subsidiary Subsidiaries in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger either:
(1) the Company Issuer would be permitted to Incur 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 of the Issuer would be greater than immediately prior to such acquisitionacquisition or merger;
(xvixvii) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company Issuer or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xviixviii) 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;
(xviiixix) Indebtedness of the Company Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the any Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xixxx) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) Indebtedness of Foreign Subsidiaries, provided, however, that the Company 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 $25.0 million at any one time outstanding;
(xxii) 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
(xxiixxiii) Indebtedness issued by incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Company Issuer or a any Restricted Subsidiary to current or former officersnot in excess, directors and employees thereof or at any direct or indirect parent thereofone time outstanding, or their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv)$7.5 million. 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, 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 such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a), the Company Issuer shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03. 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 or amortization 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 all the Incurrence of the Indebtedness under represented by such guarantee or letter of credit, as the Firstcase may be, was in compliance with this Section 4.03. For purposes of determining compliance with any U.S. dollar-Lien Revolving Facidenominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being
Appears in 1 contract
Sources: Indenture (Kerr Group Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company Issuer shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Subsidiary Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Subsidiary Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company Issuer 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) (x) the Incurrence by the Company Issuer or its Restricted Subsidiaries of Secured Indebtedness under the any Credit Agreement 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) up to in the aggregate principal amount of $4,000.0 million plus an aggregate additional principal amount outstanding at any one time that does not cause the Secured Indebtedness Leverage Ratio of the Issuer to exceed:
(1) an amount equal exceed 4.00 to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that1.00, determined on a pro forma basis after giving effect to the incurrence of such Indebtedness (and including a pro forma application of the net proceeds therefrom); and (y) the Incurrence by the Issuer or its Restricted Subsidiaries of Secured Indebtedness under the Revolving Credit Agreement or any other Credit Agreement that is a revolving, working capital or liquidity facility in an aggregate amount not to exceed the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00of (A) $750.0 million and (B) the Borrowing Base as of the date of such Incurrence;
(ii) the Incurrence by the Company Issuer and the Subsidiary Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofSubsidiary Guarantees, as applicable (including the exchange securities and related guarantees thereof)applicable;
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company Issuer to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Original Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Company Issuer occurring after September 20, 2006 and before the Issue Date, and any other acquisition or disposition of any business, assets or a Subsidiary of the Issuer occurring on or after the Issue Date in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Subsidiary Guarantor is subordinated in right of payment to the obligations of the Company Issuer under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) 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 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 Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that if Finance Co. or a Subsidiary Guarantor Incurs incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor Subsidiary Guarantor, such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Subsidiary Guarantee of such Subsidiary 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 Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are not Incurred incurred for speculative purposes andand either: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk (including resin price risk) with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company Issuer or any Restricted Subsidiary of the Company Issuer and Preferred Stock of any Restricted Subsidiary of the Company Issuer not otherwise permitted hereunder 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 (xii), does not exceed the greater of $100.0 425.0 million and 5.0% of Total Assets at any one the time outstanding 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 CompanyIssuer, 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 (or co-issuance in by the case of Finance Co.) by an Issuer or a Subsidiary Guarantor of Indebtedness or other obligations of the Company Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by such 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 Securities or the Note Subsidiary Guarantee of such Restricted Subsidiary, as applicable, any such guarantee (or co-issuance in the case of Finance Co.) of such Issuer or such Subsidiary Guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Securities or such Subsidiary Guarantor’s Note Subsidiary Guarantee with respect to the Securities, as applicable, Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Subsidiary Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company Issuer which 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 (i), (ii), (iii)(aiii), (iv), (xiv), (xv), (xix) and/or and (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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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 Securitiesrefinanced;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Subsidiary Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities or the Note Subsidiary 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 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 Issuer that is neither Finance Co. nor not a Subsidiary Guarantor that refinances Indebtedness of an the Issuer or a Restricted Subsidiary that is a Subsidiary Guarantor, or (y) Indebtedness of the Company Issuer 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 (i), (iv) or (xixxx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (i), (iv) or (xixxx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (i), (iv) or and (xixxx) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (32) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-First Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereofObligations;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (ax) the Company Issuer or any of its Restricted Subsidiaries, Incurred Subsidiaries incurred to finance an acquisition or (by) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiaries or merged with or amalgamated into the Company Issuer or a any of its Restricted Subsidiary Subsidiaries in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger either:
(1) the Company Issuer would be permitted to Incur 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 of the Issuer would be greater than immediately prior to such acquisitionacquisition or merger;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company Issuer 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 Incurrence;
(xviii) Indebtedness of the Company Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the any Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries; 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, at any one time outstanding, the greater of $100.0 million and 10.0% of the Total Assets held on the balance sheet of all Foreign Subsidiaries Incurred for working capital purposesof the Issuer, taken together, at the time of Incurrence;
(xxi) Indebtedness of the Company 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 issued by incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Company Issuer or a any Restricted Subsidiary to current or former officersnot in excess, directors and employees thereof or at any direct or indirect parent thereofone time outstanding, or their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Company or any greater of its direct or indirect parent companies to (i) $425.0 million and (ii) 5.0% of Total Assets at the extent permitted under Section 4.04(b)(iv)time of Incurrence. 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, 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 such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a), the Company Issuer shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03. 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 or amortization 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 all the Incurrence of the Indebtedness under represented by such guarantee or letter of credit, as the Firstcase may be, was in compliance with this Section 4.03. For purposes of determining compliance with any U.S. dollar-Lien Revolving Facidenominated restriction on the Incurrence of Indebtedness, the U.S.
Appears in 1 contract
Sources: Indenture (Berry Global Group 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, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the 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) up to an aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal to (x) prior to the ABL Date, $200.0 million and (y) following the ABL Date, the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) the sum of (1) $50.0 25.0 million and (2) up to $25.0 million aggregate principal amount of Indebtedness under the Credit Agreement incurred on or after the ABL Date that is in excess of the amount in clause (i)(1)(y) of this Section 4.03(b) at the time of such incurrence and (y) beginning after delivery of audited financial statements for 2009 pursuant to Section 4.02, an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-First Lien Secured Debt Ratio would be no greater than 2.375 3.0 to 1.001.0;
(ii) the Incurrence by the Company Issuers and the Guarantors of Indebtedness represented by the Original Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofNote Guaranties, as applicable (including the exchange securities Exchange Securities and related guarantees thereof);
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(iv) (a) Indebtedness (including Capitalized Lease Obligations) 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, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs incurs such Indebtedness to a Restricted Subsidiary that is neither not Finance Co. nor or a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred incurred for speculative purposes andand either: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Guarantee Guaranty with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Guarantee 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 of a Restricted Subsidiary of the Company which 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)(aiii), (iv), (xiv), (xv), (xix) and/or and (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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee Guaranty of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities or the Note Guarantee Guaranty 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;Obligations.
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; 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 pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;; and
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxiixxi) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving FaciCredit 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 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 share
Appears in 1 contract
Sources: Indenture (Verso Paper Corp.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company the Parent shall not, and shall not permit any of its the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall Parent will not permit any of its the Restricted Subsidiaries (other than Finance Co. the Company or a any Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer that, the Company and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock Stock, and any Restricted Subsidiary that is not a Guarantor may Incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock or issue shares of Preferred Stock, in each case if the Consolidated Fixed Charge Coverage Ratio of the Company Parent 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company Parent or its any Restricted Subsidiaries Subsidiary of Indebtedness under 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) up to an aggregate principal amount outstanding at any one the time of Incurrence that does not to exceed:
(1) exceed an amount equal to the greater of (1) $200.0 500.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof)Guarantees;
(aiii) Indebtedness Indebtedness, Preferred Stock and Disqualified Stock existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Parent or any of its Restricted SubsidiariesSubsidiary, Disqualified Stock issued by the Company Parent or any of its Restricted Subsidiaries Subsidiary and Preferred Stock issued by any Restricted Subsidiaries of the Company Subsidiary to finance (whether prior to or within 270 days after) the purchaseacquisition, lease, construction construction, repair, replacement or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount whichthat, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and or Preferred Stock then outstanding that was and Incurred or issued pursuant to this clause (iv), together with any Refinancing Indebtedness in respect thereof Incurred or issued pursuant to clause (xv) below, does not exceed at any one time outstanding the greater of $75.0 65.0 million and 5.02.0% of Total Assets at as of the time date such Indebtedness is Incurred or issued (plus, in the case of Incurrenceany Refinancing Indebtedness, the Additional Refinancing Amount);
(v) Indebtedness Incurred by the Company Parent 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 other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims;
(vi) Indebtedness arising from agreements of the Company Parent or a any Restricted Subsidiary providing for indemnification, adjustment of acquisition or purchase price or similar obligationsobligations (including earn-outs), in each case, Incurred or assumed in connection with the Transactions any Investments or any acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of not prohibited by this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Parent 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 Parent and their Subsidiaries) any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor is subordinated in right of payment to the obligations of the Company under the SecuritiesNotes; 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 of such IndebtednessIndebtedness not permitted by this clause (vii);
(viii) 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 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 Parent or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred StockStock not permitted by this clause (viii);
(ix) Indebtedness of a Restricted Subsidiary to the Company Parent or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor or the Company (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 Parent and its Subsidiaries), such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 Parent, the Company or another Restricted SubsidiarySubsidiary 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 IndebtednessIndebtedness not permitted by this clause (ix);
(x) Hedging Obligations that are not Incurred for speculative purposes and: but (1A) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2B) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3C) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or salessales and, in each case, extensions or replacements thereof;
(xi) obligations (including reimbursement obligations with respect to letters of credit and 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 Parent or any Restricted Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(xii) Indebtedness or Disqualified Stock of the Company Parent or any Restricted Subsidiary of the Company and Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference, which when aggregated with the principal amount or and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred or issued pursuant to this clause (xii), together with any Refinancing Indebtedness in respect thereof Incurred or issued pursuant to clause (xv) below, does not exceed $100.0 million at any one time outstanding the greater of $75.0 million and 2.5% of Total Assets as of the date such Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued (plus, in the case of any Refinancing Indebtedness, the Additional Refinancing Amount); it being understood that any Indebtedness Incurred under or Disqualified Stock or Preferred Stock issued pursuant to this clause (xii) shall cease to be deemed Incurred or issued or outstanding for purposes of this clause (xii) but shall be deemed Incurred or issued for purposes of Section 4.03(a) the first paragraph of this covenant from and after the first date on which the CompanyParent, or the Restricted Subsidiary, as the case may be, could have Incurred or issued such Indebtedness under the first paragraph of this covenant without reliance upon this clause (xii);
(xiii) Indebtedness or Disqualified Stock of the Parent 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 or issued pursuant to clause (xv) hereof, not greater than 100.0% 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 any direct or indirect parent entity of the Parent (which proceeds are contributed to the Parent or a Restricted Subsidiary) or cash contributed to the capital of the Parent (in each case other than proceeds of Disqualified Stock or sales of Equity Interests to, or contributions received from, the Parent 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 or issued pursuant to this clause (xiii) shall cease to be deemed Incurred or issued or outstanding for purposes of this clause (xiii) but shall be deemed Incurred or issued for the purposes of Section 4.03(a) from and after the first date on which the Parent or the Restricted Subsidiary, as the case may be, could have Incurred or issued such Indebtedness under Section 4.03(a) without reliance upon this clause (xiixiii));
(xiiixiv) any guarantee (by the Parent or co-issuance in the case of Finance Co.) by an Issuer or a Guarantor any Restricted Subsidiary of Indebtedness or other obligations of the Company Parent or any of its Restricted Subsidiaries Subsidiary so long as the Incurrence of such Indebtedness Incurred by such Issuer the Parent 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 Securities Notes or the Note Guarantee 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 Notes or such Guarantor’s Note Guarantee with respect to the SecuritiesGuarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities Notes or the Note Guarantee of such Restricted SubsidiaryGuarantee, as applicable, and (B) if such guarantee is of Indebtedness of the Parent, such guarantee is Incurred in accordance with, or not in contravention of Section 4.11 solely to the extent Section 4.11 is applicable;
(xivxv) the Incurrence by the Company Parent or any of its the Restricted Subsidiaries of Indebtedness or Disqualified Stock Stock, or by any Restricted Subsidiary of Preferred Stock of a Restricted Subsidiary of the Company which 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)(aiii), (iv), (xivxii), (xiii), (xv), (xix) and/or xvi), (xx) and (xxiv) of this Section 4.03(b) up to the outstanding principal amount (or, if applicable, the liquidation preference, face amount, or the like) or, if greater, committed amount (only to the extent the committed amount could have been Incurred or issued on the date of initial Incurrence or issuance and was deemed Incurred or issued 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 was issued pursuant to Section 4.03(a) or clauses (ii), (iii), (iv), (xii), (xiii), (xv), (xvi), (xx) and (xxiv) of this Section 4.03(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 plus any additional Indebtedness, Disqualified Stock or Preferred Stock Incurred or issued to pay premiums (including 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:
(1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred or issued 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 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 or refinanced that were due on or after the date that is one year following the last maturity date of any Securities Notes then outstanding were instead due on such date one year following the last date (provided that this subclause (1) will not apply to any refunding or refinancing of maturity any Secured Indebtedness or Indebtedness of the Securitiesnon-Guarantors);
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities Notes or the Note Guarantee of such Restricted Subsidiarya Guarantee, as applicable, such Refinancing Indebtedness is junior to the Securities Notes or the Note Guarantee of such Restricted SubsidiaryGuarantee, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;
(4) 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;
(53) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is neither Finance Co. nor not a Guarantor that refinances Indebtedness of an Issuer the Parent, the Company or a Restricted Subsidiary that is a Guarantor, or (y) Indebtedness of the Parent, 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 (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xvxvi) Indebtedness, Disqualified Stock or Preferred Stock of (aA) the Company Parent or any of its Restricted Subsidiaries, Guarantor Incurred or issued to finance an acquisition or (bB) Persons that are acquired by the Company Parent or any of its Restricted Subsidiaries Subsidiary or merged are merged, consolidated or amalgamated with or into the Company Parent or a any Restricted Subsidiary in accordance with the terms of this IndentureIndenture (so long as such Indebtedness or issuance of Disqualified Stock or Preferred Stock is not Incurred or issued in contemplation of such acquisition, merger, consolidation or amalgamation); provided, however, provided that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger, consolidation or amalgamation, either:
(1) the Company Parent would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in the first sentence of Section 4.03(a); or
(2) the Consolidated Fixed Charge Coverage Ratio of the Parent would be greater no less than immediately prior to such acquisition;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company acquisition or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings)merger, consolidation or amalgamation;
(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 Parent or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Facipurs
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company Issuer shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company Issuer 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company Issuer or its Restricted Subsidiaries of Secured Indebtedness under the Credit Agreement 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) up to in the aggregate principal amount of $2,715 million plus an aggregate additional principal amount outstanding at any one time that does not cause the Secured Indebtedness Leverage Ratio of the Issuer to exceed:
(1) an amount equal exceed 4.00 to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that1.00, determined on a pro forma basis after giving effect to the incurrence of such Indebtedness (and including a pro forma application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company Issuer and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofGuarantees, as applicable (including the exchange securities Exchange Securities and related guarantees thereof);
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company Issuer to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Original Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Company Issuer occurring after September 20, 2006 and before the Issue Date, and any other acquisition or disposition of any business, assets or a Subsidiary of the Issuer occurring on or after the Issue Date in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor is subordinated in right of payment to the obligations of the Company Issuer under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) 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 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 Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor Guarantor, such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are not Incurred incurred for speculative purposes andand either: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk (including resin price risk) with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company Issuer or any Restricted Subsidiary of the Company Issuer and Preferred Stock of any Restricted Subsidiary of the Company Issuer not otherwise permitted hereunder 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 (xii), does not exceed the greater of $100.0 million and 4.5% of Total Assets at any one the time outstanding 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 CompanyIssuer, 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 (or co-issuance in by the case of Finance Co.) by an Issuer or a Guarantor of Indebtedness or other obligations of the Company Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by such 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 Securities or the Note Guarantee 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 Guarantee with respect to the Securities, as applicable, Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company Issuer which 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)(aiii), (iv), (xiv), (xv), (xix) and/or and (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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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 Securitiesrefinanced;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 Issuer that is neither Finance Co. nor not a Guarantor that refinances Indebtedness of an the Issuer or a Restricted Subsidiary that is a Guarantor, or (y) Indebtedness of the Company Issuer 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 (xixxx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xixxx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or and (xixxx) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (32) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-First Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereofObligations;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (ax) the Company Issuer or any of its Restricted Subsidiaries, Incurred Subsidiaries incurred to finance an acquisition or (by) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiaries or merged with or amalgamated into the Company Issuer or a any of its Restricted Subsidiary Subsidiaries in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger either:
(1) the Company Issuer would be permitted to Incur 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 of the Issuer would be greater than immediately prior to such acquisitionacquisition or merger;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company Issuer 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 Incurrence;
(xviii) Indebtedness of the Company Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the any Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Subsidiaries; provided, however, that the aggregate principal amount of Indebtedness Incurred for working capital purposesunder 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 $25.0 million at any one time outstanding;
(xxi) Indebtedness of the Company 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 issued by incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Company Issuer or a any Restricted Subsidiary to current or former officersnot in excess, directors and employees thereof or at any direct or indirect parent thereofone time outstanding, or their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv)$7.5 million. 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, 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 such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a), the Company Issuer shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03. Any Indebtedness Incurred between September 20, 2006 and the Issue Date and outstanding immediately after the Issue Date and classified by the Issuer at such time under the Existing 2006 Second Priority Notes Indenture as (a) Indebtedness pursuant to Section 4.03(b)(xii) of the Existing 2006 Second Priority Notes Indenture shall be deemed to have been initially Incurred under Section 4.03(b)(xii) of this Indenture, (b) Indebtedness pursuant to Section 4.03(b)(xx) of the Existing 2006 Second Priority Notes Indenture shall be deemed to have been initially Incurred under Section 4.03(b)(xx) of this Indenture, and (c) Indebtedness pursuant to Section 4.03(b)(xxii) of the Existing 2006 Second Priority Notes Indenture shall be deemed to have been initially Incurred under Section 4.03(b)(xxii) of this Indenture. 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 or amortization 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 all the Incurrence of the Indebtedness under represented by such guarantee or letter of credit, as the Firstcase may be, was in compliance with this Section 4.03. For purposes of determining compliance with any U.S. dollar-Lien Revolving Facidenomi
Appears in 1 contract
Sources: Indenture (Berry Plastics Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company Issuer shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Subsidiary Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Subsidiary Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company Issuer 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) (x) the Incurrence by the Company Issuer or its Restricted Subsidiaries of Secured Indebtedness under the any Credit Agreement 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) up to in the aggregate principal amount of $9,000.0 million plus an aggregate additional principal amount outstanding at any one time that does not cause the Secured Indebtedness Leverage Ratio of the Issuer to exceed:
(1) an amount equal exceed 4.00 to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that1.00, determined on a pro forma basis after giving effect to the incurrence of such Indebtedness (and including a pro forma application of the net proceeds therefrom)) and (y) the Incurrence by the Issuer or its Restricted Subsidiaries of Secured Indebtedness under the Revolving Credit Agreement or any other Credit Agreement that is a revolving, working capital or liquidity facility in an aggregate amount not to exceed the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00of (A) $1,250.0 million and (B) the Borrowing Base as of the date of such Incurrence;
(ii) the Incurrence by the Company Issuer and the Subsidiary Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofSubsidiary Guarantees, as applicable (including the exchange securities and related guarantees thereof)applicable;
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company Issuer to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Original Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Company Issuer occurring after September 20, 2006 and before the Issue Date, and any other acquisition or disposition of any business, assets or a Subsidiary of the Issuer occurring on or after the Issue Date in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Subsidiary Guarantor is subordinated in right of payment to the obligations of the Company Issuer under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) 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 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 Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that if Finance Co. or a Subsidiary Guarantor Incurs incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor Subsidiary Guarantor, such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Subsidiary Guarantee of such Subsidiary 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 Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are not Incurred incurred for speculative purposes andand either: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk (including resin price risk) with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company Issuer or any Restricted Subsidiary of the Company Issuer and Preferred Stock of any Restricted Subsidiary of the Company Issuer not otherwise permitted hereunder 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 (xii), does not exceed the greater of $100.0 425.0 million and 5.0% of Total Assets at any one the time outstanding 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 CompanyIssuer, 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 (or co-issuance in by the case of Finance Co.) by an Issuer or a Subsidiary Guarantor of Indebtedness or other obligations of the Company Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by such 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 Securities or the Note Subsidiary Guarantee of such Restricted Subsidiary, as applicable, any such guarantee (or co-issuance in the case of Finance Co.) of such Issuer or such Subsidiary Guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Securities or such Subsidiary Guarantor’s Note Subsidiary Guarantee with respect to the Securities, as applicable, Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Subsidiary Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company Issuer which 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 (i), (ii), (iii)(aiii), (iv), (xiv), (xv), (xix) and/or and (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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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 Securitiesrefinanced;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Subsidiary Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities or the Note Subsidiary 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 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 Issuer that is neither Finance Co. nor not a Subsidiary Guarantor that refinances Indebtedness of an the Issuer or a Restricted Subsidiary that is a Subsidiary Guarantor, or (y) Indebtedness of the Company Issuer 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 (i), (iv) or (xixxx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (i), (iv) or (xixxx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (i), (iv) or and (xixxx) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (32) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-First Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereofObligations;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (ax) the Company Issuer or any of its Restricted Subsidiaries, Incurred Subsidiaries incurred to finance an acquisition or (by) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiaries or merged with or amalgamated into the Company Issuer or a any of its Restricted Subsidiary Subsidiaries in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger either:
(1) the Company Issuer would be permitted to Incur 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 of the Issuer would be greater than immediately prior to such acquisitionacquisition or merger;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company Issuer 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 Incurrence;
(xviii) Indebtedness of the Company Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the any Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries; 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, at any one time outstanding, the greater of $100.0 million and 10.0% of the Total Assets held on the balance sheet of all Foreign Subsidiaries Incurred for working capital purposesof the Issuer, taken together, at the time of Incurrence;
(xxi) Indebtedness of the Company 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 issued by incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Company Issuer or a any Restricted Subsidiary to current or former officersnot in excess, directors and employees thereof or at any direct or indirect parent thereofone time outstanding, or their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Company or any greater of its direct or indirect parent companies to (i) $425.0 million and (ii) 5.0% of Total Assets at the extent permitted under Section 4.04(b)(iv)time of Incurrence. 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, 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 such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a), the Company Issuer shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving FaciTerm Loan Credit Agreement outstanding on the Issue Date shall be deemed to have been incurred pursuant to the fixed dollar prong of clause (i) and the Issuer 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, accretion or amortization 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 th
Appears in 1 contract
Sources: Indenture (Berry Global Group, Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer (i) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; Stock and (ii) the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Consolidated Leverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued Issuer would have been at least 2.00 less than or equal to 1.00 4.0 to 1.0 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, 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 period for which the EBITDA component of the Consolidated Leverage Ratio calculation is being measured.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company Issuer or its Restricted Subsidiaries any Guarantor of Indebtedness under the a 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) up to an in the aggregate principal amount outstanding at any one time not to exceed:
exceed $10,000,000; provided, that (1A) an amount equal if such Indebtedness is Secured Indebtedness, such Indebtedness shall be secured only by ABL Collateral, (B) such Credit Agreement shall be with a lender or lenders satisfactory to the greater Holders in their sole discretion, (C) at each time when such a Credit Agreement is entered into and for so long as any such Credit Agreement remains outstanding, the Issuer (on a consolidated basis) has $100,000,000 of net revenues for the most recently completed twelve calendar month period determined in accordance with GAAP, (1D) $200.0 million the Issuer shall deliver an Officers’ Certificate to the Trustee (upon entering into such a Credit Agreement and each month thereafter that such Credit Agreement remains outstanding) certifying as to the satisfaction of the foregoing clause (C), (E) advances under any such Credit Agreement shall be subject to a customary borrowing base formula and (2F) the Borrowing Base; plus
(2) Issuer shall only use the greater of (x) $50.0 million proceeds from the borrowings under any such Credit Agreement for short-term working capital requirements and (y) an amount treasury-related activities such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00as customary hedging activities permitted by this Indenture;
(ii) the Incurrence by any of the Company Issuer and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof)Guarantees;
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]Date;
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Issuer or any of its Restricted SubsidiariesGuarantor, and Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company Guarantor, to finance (whether prior to or within 270 days after) the purchaseacquisition, lease, construction construction, repair, replacement or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) that (A) is without recourse to any property or assets (but no of the Issuer or any Restricted Subsidiary other material assets)) than the assets so acquired, leased, constructed, repaired, replaced or improved and (bB) Acquired Indebtedness; is in an aggregate principal amount whichthat, when aggregated with the principal amount of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence2,000,000;
(v) Indebtedness 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 authoritiesGovernmental Authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims;
(vi) Indebtedness arising from agreements of the Company Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligationsobligations (including earn-out obligations or other contingent consideration), in each case, Incurred in connection with the Transactions or any acquisition or disposition Disposition of any business, any assets or a Subsidiary of the Company Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) 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 neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(a), (iv), (xiv), (xv), (xix) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Faci
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company Issuer shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company Issuer 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company Issuer or its Restricted Subsidiaries of Secured Indebtedness under the Credit Agreement 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) up to in the aggregate principal amount of $2,715 million plus an aggregate additional principal amount outstanding at any one time that does not cause the Secured Indebtedness Leverage Ratio of the Issuer to exceed:
(1) an amount equal exceed 4.00 to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that1.00, determined on a pro forma basis after giving effect to the incurrence of such Indebtedness (and including a pro forma application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company Issuer and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofGuarantees, as applicable (including the exchange securities Exchange Securities and related guarantees thereof);
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company Issuer to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Original Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Company Issuer occurring after September 20, 2006 and before the Issue Date, and any other acquisition or disposition of any business, assets or a Subsidiary of the Issuer occurring on or after the Issue Date in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor is subordinated in right of payment to the obligations of the Company Issuer under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) 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 Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Re- stricted 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) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor Guarantor, such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are not Incurred incurred for speculative purposes andand either: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk (including resin price risk) with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company Issuer or any Restricted Subsidiary of the Company Issuer and Preferred Stock of any Restricted Subsidiary of the Company Issuer not otherwise permitted hereunder 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 (xii), does not exceed the greater of $100.0 million and 4.5% of Total Assets at any one the time outstanding 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 CompanyIssuer, 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 (or co-issuance in by the case of Finance Co.) by an Issuer or a Guarantor of Indebtedness or other obligations of the Company Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by such 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 Securities or the Note Guarantee 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 Guarantee with respect to the Securities, as applicable, Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company Issuer which 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 (i), (ii), (iii)(aiii), (iv), (xiv), (xv), (xix) and/or and (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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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 Securitiesrefinanced;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 Issuer that is neither Finance Co. nor not a Guarantor that refinances Indebtedness of an the Issuer or a Restricted Subsidiary that is a Guarantor, or (y) Indebtedness of the Company Issuer 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 (i), (iv) or (xixxx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (i), (iv) or (xixxx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (i), (iv) or and (xixxx) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (32) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-First Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereofObligations;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (ax) the Company Issuer or any of its Restricted Subsidiaries, Incurred Subsidiaries incurred to finance an acquisition or (by) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiaries or merged with or amalgamated into the Company Issuer or a any of its Restricted Subsidiary Subsidiaries in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger either:
(1) the Company Issuer would be permitted to Incur 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 of the Issuer would be greater than immediately prior to such acquisitionacquisition or merger;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company Issuer 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 Incurrence;
(xviii) Indebtedness of the Company Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the any Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Subsidiaries; provided, however, that the aggregate principal amount of Indebtedness Incurred for working capital purposesunder 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 $25.0 million at any one time outstanding;
(xxi) Indebtedness of the Company 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 issued by incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Company Issuer or a any Restricted Subsidiary to current or former officersnot in excess, directors and employees thereof or at any direct or indirect parent thereofone time outstanding, or their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv)$7.5 million. 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, 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 such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a), the Company Issuer shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03. 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 or amortization 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 all the Incurrence of the Indebtedness under represented by such guarantee or letter of credit, as the Firstcase may be, was in compliance with this Section 4.03. For purposes of determining compliance with any U.S. dollar-Lien Revolving Facidenominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to ha
Appears in 1 contract
Sources: Indenture (Berry Plastics Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect, contingently or otherwise (collectively, "incur" and collectively, an "incurrence"), to any Indebtedness (including Acquired Indebtedness) or and Holdings shall not issue any shares of Disqualified Stock; Stock and (ii) the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary the Obligors may Incur incur Indebtedness (including Acquired Guarantor Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of or Preferred Stock, in each case as applicable, if the Fixed Charge Coverage Consolidated Leverage Ratio of the Company on a consolidated basis 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 or such Disqualified Stock or Preferred Stock is issued Holdings and its Subsidiaries would have been at least 2.00 less than 4.00 to 1.00 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been 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 limitations set forth in provisions of Section 4.03(a4.07(a) hereof shall not apply to:
(i) the Incurrence incurrence by the Company or its Restricted Subsidiaries an Obligor of Indebtedness under the Credit Agreement Facilities and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof) ), up to an aggregate principal amount of $1.0 billion outstanding at any one time time, less the aggregate amount of amortization and mandatory principal payments (excluding repayments of any revolving facility thereunder that do not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on result in a pro forma basis after giving effect to the incurrence permanent reduction or cancellation of such Indebtedness (and application revolving facility) actually made by an Obligor in respect of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00such Indebtedness;
(ii) the Incurrence by Indebtedness of an Obligor under the Company Existing Notes and the Guarantors Indebtedness of Indebtedness represented by the Securities (not including any Additional Securities) and an Obligor under the Existing First-Lien Notes issued on Bridge Loan immediately following the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued Refinancing, in each case less the aggregate amount of amortization and mandatory or voluntary principal payments actually made by such Obligor thereunder after the Existing First-Lien Issue Date) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof);
(aiii) Indebtedness existing on of any Person that becomes a Subsidiary of Holdings after the Existing First-Lien Issue Date date hereof; provided that such Indebtedness exists at the time such Person becomes a Subsidiary of Holdings and is not created in contemplation of or in connection with such Person becoming a Subsidiary of Holdings; provided, further, that the aggregate principal amount of Indebtedness permitted to exist by this clause (after giving effect to the Transactionsiii) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]shall not exceed $25,000,000.00 at any time outstanding;
(aiv) Indebtedness (including Capitalized Lease Obligations) 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 incurred to finance (whether prior to or within 270 days after) the purchase, leaseacquisition, construction or improvement of property (real any fixed or personal) or equipment (whether through capital assets, including Capital Lease Obligations and any Indebtedness assumed in connection with the direct purchase acquisition of any such assets or secured by a Lien on any such assets prior to the Capital Stock acquisition thereof, and extensions, renewals and replacements of any Person owning such assets Indebtedness that do not increase the outstanding principal amount thereof; provided that (but no other material assets)x) such Indebtedness is incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement and (by) Acquired Indebtedness; in an the aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to Indebtedness permitted by this clause (iv), does ) shall not exceed the greater of $75.0 million and 5.0% of Total Assets 25,000,000.00 at the any time of Incurrenceoutstanding;
(v) Indebtedness Incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect incurred in relation to letters of credit and bank guarantees issued arrangements made in the ordinary course of business, including without limitation letters business to facilitate the operation 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 claimsbank accounts on a net balance basis;
(vi) short term Indebtedness arising from agreements banks incurred in the ordinary course of the Company or business pursuant to a Restricted Subsidiary providing facility required in order to comply with rules and regulations issued from time to time by regulatory authorities; provided that such compliance is required for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets Holdings or a Subsidiary of the Company in accordance with the terms of this IndentureHoldings, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such as applicable, to remain licensed to conduct its business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Holdings or any of its Wholly-Owned Subsidiaries to a Restricted SubsidiaryHoldings or any of its Wholly-Owned Subsidiaries; provided that any such Indebtedness (except for Indebtedness represented by any guarantee provided by Holdings in favor of a Wholly-Owned Subsidiary in respect of Indebtedness of another Wholly-Owned Subsidiary the subordination of which would be prohibited by the FSA or the UK Pensions Trustee) that is owed by an Obligor to a Restricted Subsidiary that is neither Finance Co. nor Non-Obligor in excess of $100,000,000.00 in the aggregate shall be subordinated pursuant a Guarantor is subordinated subordination agreement in right of payment the form attached hereto as Exhibit F or on terms reasonably satisfactory to the obligations of the Company under the SecuritiesRequired Holders; 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 Holdings or another Restricted Subsidiaryany of its Wholly-Owned Subsidiaries) shall be deemed, in each case, to be an Incurrence incurrence of such IndebtednessIndebtedness that was not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) 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 neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (or co-issuance in the case of Finance Co.) incurrence 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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company or any of its Restricted Subsidiaries Obligor of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company which that serves to extend, refund, refinance refinance, renew, replace or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued incurred as permitted under Section 4.03(a4.07(a) and clauses hereof, this clause (ii), (iii)(a), (iv), (xiv), (xv), (xix) and/or (xx) of this Section 4.03(bviii) or any Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock Incurred issued to so refund or refinance such Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock, including any Indebtedness, additional Indebtedness or Disqualified Stock or Preferred Stock Incurred incurred to pay premiums premiums, 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:
(1A) 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 the 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 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 SecuritiesNotes;
(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 (y) 91 days following the maturity date of the Securities;
(3B) to the extent such Refinancing Indebtedness refinances (ax) Indebtedness junior subordinated or pari passu to the Securities Notes or the Note Guarantee of such Restricted Subsidiary, as applicableany Guarantee, such Refinancing Indebtedness is junior subordinated or pari passu to the Securities Notes or such Guarantee at least to the Note Guarantee of such Restricted Subsidiary, same extent as applicable, the Indebtedness being refinanced or refunded or (by) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is must be Disqualified Stock or Preferred Stock;
(4) 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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
(6C) in such Indebtedness is issued and guaranteed by the case of any Refinancing same entities that issued and/or guaranteed the Indebtedness Incurred to refinance Indebtedness outstanding under clause (iv) being redeemed, repurchased, acquired or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b)retired; provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;and
(xvix) Indebtedness, Disqualified Stock or Preferred Stock other Indebtedness of (a) the Company Holdings or any of its Restricted Subsidiaries, Incurred to finance Subsidiaries in an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a aggregate principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) Indebtedness of the Company or exceeding $150,000,000.00 at 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 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Facioutstanding.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) From and after the Escrow Release Date:
(i) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company Issuer shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Subsidiary Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Subsidiary Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company Issuer 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) (x) the Incurrence by the Company Issuer or its Restricted Subsidiaries of Secured Indebtedness under the any Credit Agreement 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) up to in the aggregate principal amount of $9,000.0 million plus an aggregate additional principal amount outstanding at any one time that does not cause the Secured Indebtedness Leverage Ratio of the Issuer to exceed:
(1) an amount equal exceed 4.00 to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that1.00, determined on a pro forma basis after giving effect to the incurrence of such Indebtedness (and including a pro forma application of the net proceeds therefrom)) and (y) the Incurrence by the Issuer or its Restricted Subsidiaries of Secured Indebtedness under the Revolving Credit Agreement or any other Credit Agreement that is a revolving, working capital or liquidity facility in an aggregate amount not to exceed the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00of (A) $1,250.0 million and (B) the Borrowing Base as of the date of such Incurrence;
(ii) the Incurrence by the Company Issuer and the Subsidiary Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofSubsidiary Guarantees, as applicable (including the exchange securities and related guarantees thereof)applicable;
(aiii) (x) the Incurrence by the Issuer and the Subsidiary Guarantors of Indebtedness represented by the First Priority Notes in an aggregate amount not to exceed $1,250.0 million and the subsidiary guarantees thereof and (y) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i), (ii) and (iiiii)(x) of this Section 4.03(b)) and (b) [reserved]);
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company Issuer to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Original Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Company Issuer occurring after September 20, 2006 and before the Escrow Release Date, and any other acquisition or disposition of any business, assets or a Subsidiary of the Issuer occurring on or after the Escrow Release Date in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Subsidiary Guarantor is subordinated in right of payment to the obligations of the Company Issuer under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) 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 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 Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness ndebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that if Finance Co. or a Subsidiary Guarantor Incurs incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor Subsidiary Guarantor, such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Subsidiary Guarantee of such Subsidiary 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 Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are not Incurred incurred for speculative purposes andand either: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk (including resin price risk) with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company Issuer or any Restricted Subsidiary of the Company Issuer and Preferred Stock of any Restricted Subsidiary of the Company Issuer not otherwise permitted hereunder 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 (xii), does not exceed the greater of $100.0 425.0 million and 5.0% of Total Assets at any one the time outstanding 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 CompanyIssuer, 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 (or co-issuance in by the case of Finance Co.) by an Issuer or a Subsidiary Guarantor of Indebtedness or other obligations of the Company Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by such 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 Securities or the Note Subsidiary Guarantee of such Restricted Subsidiary, as applicable, any such guarantee (or co-issuance in the case of Finance Co.) of such Issuer or such Subsidiary Guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Securities or such Subsidiary Guarantor’s Note Subsidiary Guarantee with respect to the Securities, as applicable, Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Subsidiary Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company Issuer which 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 (i), (ii), (iii)(aiii), (iv), (xiv), (xv), (xix) and/or and (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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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 Securitiesrefinanced;
(2) has as 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 (a) Indebtedness junior to the Securities or the Note Subsidiary Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities or the Note Subsidiary 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 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 Issuer that is neither Finance Co. nor not a Subsidiary Guarantor that refinances Indebtedness of an the Issuer or a Restricted Subsidiary that is a Subsidiary Guarantor, or (y) Indebtedness of the Company Issuer 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 (i), (iv) or (xixxx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (i), (iv) or (xixxx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (i), (iv) or and (xixxx) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (32) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-First Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereofObligations;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (ax) the Company Issuer or any of its Restricted Subsidiaries, Incurred Subsidiaries incurred to finance an acquisition or (by) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiaries or merged with or amalgamated into the Company Issuer or a any of its Restricted Subsidiary Subsidiaries in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger either:
(1) the Company Issuer would be permitted to Incur 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 of the Issuer would be greater than immediately prior to such acquisitionacquisition or merger;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company Issuer 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 Incurrence;
(xviii) Indebtedness of the Company Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the any Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries; 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, at any one time outstanding, the greater of $100.0 million and 10.0% of the Total Assets held on the balance sheet of all Foreign Subsidiaries Incurred for working capital purposesof the Issuer, taken together, at the time of Incurrence;
(xxi) Indebtedness of the Company 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 issued by incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Company Issuer or a any Restricted Subsidiary to current or former officersnot in excess, directors and employees thereof or at any direct or indirect parent thereofone time outstanding, or their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Company or any greater of its direct or indirect parent companies to (i) $425.0 million and (ii) 5.0% of Total Assets at the extent permitted under Section 4.04(b)(iv)time of Incurrence. 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, 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 such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a), the Company Issuer shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving FaciTerm Loan Credit Agreement outstanding on the Issue Date and all additional Indebtedness under the Term Loan Credit Agreement outstanding on the Escrow Release Date shall be deemed to have been incurred pursuant to the fixed dollar prong of clause (i) and the Issuer 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, accretion or amortization of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuat
Appears in 1 contract
Sources: Indenture (Berry Global Group Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a1) (i) The Company the Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and and
(ii2) the Company Borrower shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer the Borrower and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company Borrower and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available (or, if earlier, were required to be delivered pursuant to Section 6.02(a) or (b)) 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 determined on a pro forma basis Pro Forma Basis; provided, further, that the aggregate amount of Indebtedness (including a pro forma application of the net proceeds therefrom), as if the additional any Refinancing Indebtedness had been Incurred, or the in respect thereof and any Acquired Indebtedness) that may be Incurred and Disqualified Stock or Preferred Stock had been issued, as that may be issued pursuant to the case may be, foregoing by Restricted Subsidiaries that are not Loan Parties shall not exceed the greater of (x) $100.0 million and the application (y) 3.25% of proceeds therefrom had occurred Total Assets at the beginning time of such four-quarter periodIncurrence, at any one time outstanding.
(b) The foregoing limitations set forth in Section 4.03(a) shall will not apply to:to (collectively, “Permitted Debt”):
(i) the Incurrence by the Company Borrower or its Restricted Subsidiaries of Indebtedness under the 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) Loan Documents up to an aggregate principal amount not to exceed $1,100.0 million outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00time;
(ii) the Incurrence by the Company Borrower and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) Senior Notes and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees Guarantees thereof, as applicable (including the and any exchange securities notes issued in respect of such Senior Notes and related guarantees Guarantees thereof)) in an aggregate principal amount not to exceed $475.0 million;
(aiii) Indebtedness of the Borrower or any of its Restricted Subsidiaries existing on the Existing First-Lien Issue Closing Date (after giving effect to the Transactions) (other than Indebtedness described in clauses clause (i) and or (ii) of this Section 4.03(b)) and (b) [reserved]);
(aiv) Indebtedness (including including, without limitation, Capitalized Lease ObligationsObligations and mortgage financings as purchase money obligations) Incurred by the Company Borrower or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company Borrower 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, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) 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 neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(a), (iv), (xiv), (xv), (xix) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving FaciRestricted
Appears in 1 contract
Sources: Credit Agreement
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company Issuer shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Consolidated Leverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 Issuer does not exceed 3.5 to 1.00 1.0 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock 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 period for which the EBITDA component of the Consolidated Leverage Ratio calculation is being measured.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company Issuer or its any Restricted Subsidiaries Subsidiary of Indebtedness under the a 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) up to an in the aggregate principal amount outstanding at any one time time, taken together with the aggregate principal amount of Indebtedness outstanding pursuant to clauses (xvi) and (xxvii), not to exceed:
(1) an amount equal to the greater of (1) exceed $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.0020,000,000 at any one time outstanding;
(ii) the Incurrence by any of the Company Issuer and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof)Guarantees;
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and any Guarantor’s guarantee thereof (bwhether or not such guarantee existed on the Issue Date) [reserved]which, for the avoidance of doubt, shall include the Interim Payments Note;
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Issuer or any of its Restricted SubsidiariesSubsidiary, and Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company Subsidiary, to finance (whether prior to or within 270 days after) the purchaseacquisition, lease, construction construction, repair, replacement or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount whichthat, when aggregated with the principal amount of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence10,000,000;
(v) Indebtedness 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 authoritiesGovernmental Authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims;
(vi) Indebtedness arising from agreements of the Company Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligationsobligations (including earn-out obligations and other contingent consideration), in each case, Incurred or assumed in connection with the Transactions or any acquisition or disposition of any business, any assets or a Subsidiary of the Company Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person (other than the Issuer or a Restricted Subsidiary) acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor is subordinated in right of payment to the obligations of the Company Issuer under the Securities; 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) shall be deemed, in each case, to be an Incurrence of such IndebtednessIndebtedness not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another Restricted Subsidiarya Guarantor; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary Guarantor that holds such shares of Preferred Stock of another a Restricted Subsidiary ceasing to be a Restricted Subsidiary Guarantor or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another Restricted Subsidiarya Guarantor) shall be deemed, in each case, to be an issuance of shares of Preferred StockStock not permitted by this clause (viii);
(ix) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted SubsidiarySubsidiary of the Issuer; provided provided, that if Finance Co. or any such Indebtedness owed by a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor such Indebtedness is subordinated in right of payment to the Guarantee of the Securities (in the case of Finance Co.) or the Note Guarantee of such Guarantor, as applicable; provided, provided further, that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary of the Issuer holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary of the Issuer 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 (ix);
(x) Hedging Obligations of the Issuer or any Guarantor that are not Incurred incurred for speculative purposes andbut: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales;
(xi) obligations (including reimbursement obligations with obligations) in respect to of letters of credit and bank guarantees) in respect of , performance, bid, appeal and surety bonds, completion guarantees, workers’ compensation claims, self-insurance obligations, bankers’ acceptances, export or import, indemnities, customs, revenue bonds and completion guarantees provided by or similar instruments of the Company Issuer or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company Issuer or any Restricted Subsidiary of the Company and Preferred Stock of any Restricted Subsidiary of the Company Guarantor not otherwise permitted hereunder under this Indenture in an aggregate principal amountamount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million 10,000,000 at any one time outstanding (it being understood that any Indebtedness Incurred under 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 CompanyIssuer, or the Restricted SubsidiaryGuarantor, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii));
(xiii) any guarantee (or co-issuance in by the case of Finance Co.) by an Issuer or a Guarantor Restricted Subsidiary of Indebtedness or other obligations of the Company Issuer or any of its other Restricted Subsidiaries Subsidiary so long as the Incurrence of such Indebtedness Incurred by such the Issuer or such other 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 Note Guarantee of such Restricted Subsidiaryany Guarantor, 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 Guarantee with respect to the Securities, as applicable, Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Guarantee of such Restricted SubsidiaryGuarantor, as applicable;
(xiv) the Incurrence by the Company Issuer or any of its Restricted Subsidiaries Guarantor of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company which Guarantor 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)(aiii), (iv), (xii), (xiv), (xv), (xix) and/or and (xxxxi) of this Section 4.03(b) or any Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock, including any Indebtedness, additional Indebtedness or Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums and fees paid-in-kind interest), fees, expenses and defeasance costs in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, provided that such Refinancing Indebtedness:
(1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which that is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Indebtedness or Disqualified Stock being refunded, refinanced 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 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 Securitiesdefeased;
(2) has a Stated Maturity which that is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or and (y) 91 days following the maturity date Stated Maturity of the Securities;
(3) to the extent such Refinancing Indebtedness refunds, refinances or defeases (a) Indebtedness junior in right of payment to the Securities or the Note Guarantee of such Restricted Subsidiarya Guarantee, as applicable, such Refinancing Indebtedness is junior in right of payment to the Securities or a Guarantee to the Note Guarantee of same extent as such Restricted SubsidiaryIndebtedness being refunded, refinanced or defeased, 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 refunded, refinanced or defeased plus premiumpremium (including tender premium and paid-in-kind interest), fees fees, expenses and expenses defeasance costs Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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[reserved]; and
(6) in the case of any Refinancing Indebtedness Incurred to refund, refinance or defease Indebtedness outstanding under clause (iv), (xii), (xix) or (xixxxi) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv), (xii), (xix) or (xixxxi) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses clause (iv), (xii), (xix) or (xixxxi) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of (ax) the Company Issuer or any of its Restricted Subsidiaries, Incurred Subsidiary incurred to finance an acquisition of any property or assets or (by) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiaries Subsidiary or merged merged, consolidated or amalgamated with or into the Company Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; providedprovided that, howeverin each case, that immediately after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger, consolidation or amalgamation either:
(1) the Company Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Consolidated Leverage Ratio test set forth in the first sentence of Section 4.03(a); or
(2) the Fixed Charge Coverage Consolidated Leverage Ratio would be greater less than immediately prior to such acquisition or merger, consolidation or amalgamation; provided, further, that if, with respect to any Indebtedness incurred under this clause (xv), either (A) the property or assets so acquired are held in a Restricted Subsidiary that is not a Guarantor or (B) the Person so acquired does not become, upon acquisition, a Guarantor, then, in each case, the Issuer and the Guarantors shall not guarantee any such Indebtedness, and such Indebtedness shall have no recourse to any assets or property of the Issuer or the Guarantors;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company Issuer or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings), in the aggregate principal amount outstanding at any one time, taken together with the aggregate principal amount of Indebtedness outstanding pursuant to clauses (i) and (xxvii), not to exceed $20,000,000 at any one time outstanding;
(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 receipt by the Issuer or the applicable Restricted Subsidiary of notice of its Incurrence;
(xviii) Indebtedness of the Company Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the a Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit, to the extent such letter of credit or bank guarantee issued pursuant to such Credit Agreement is otherwise permitted by this Section 4.03;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) Indebtedness of the Company 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;
(xxi) Indebtedness of the Issuer or any Guarantor Incurred in connection with an Investment in, or representing guarantees of Indebtedness of, joint ventures of the Issuer or any Guarantor in an aggregate principal amount, at any one time outstanding, not to exceed $1,000,000 at the time of Incurrence;
(xxii) Indebtedness of the Issuer or any Guarantor issued to any joint venture (regardless of the form of 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 Issuer or any Guarantor, at any one time not to exceed $500,000;
(xxiii) the Incurrence by the Company Issuer or any Guarantor of Subordinated Indebtedness that is unsecured and subordinated in right of payment to the Securities with a Stated Maturity and, if applicable, a First Amortization Date no earlier than 91 days following the Stated Maturity of the Securities;
(xxiv) Indebtedness related to unfunded pension fund and other employee benefit plan obligations and liabilities to the extent they are permitted to remain unfunded under applicable law;
(xxv) Indebtedness of Restricted Subsidiaries that are not Guarantors, at any one time not to exceed $1,000,000 at the time of Incurrence;
(xxvi) Indebtedness of the Issuer or any Restricted Subsidiary to current the extent the net proceeds thereof are substantially concurrently (i) used to purchase all of the Securities pursuant to a Change of Control Offer, a tender offer or former officers, directors and employees thereof pursuant to Section 3.01 or (ii) deposited to defease all of the Securities as described in Article 8; and
(xxvii) Indebtedness or Disqualified Stock of the Issuer 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 the Company or any of its direct or indirect parent companies to the extent Guarantor not otherwise permitted under Section 4.04(b)(ivthis Indenture in an aggregate principal amount or liquidation preference, which when taken together with the aggregate principal amount of Indebtedness outstanding pursuant to clauses (i) and (xvi), does not exceed $20,000,000 at any one time outstanding. For purposes of determining compliance with this Section 4.03, in the event that an item, item of Indebtedness or a portion of such item, taken by itself, of Indebtedness, Disqualified Stock (or Preferred Stock any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xxiixxvi) above of this Section 4.03(b) or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving FaciInc
Appears in 1 contract
Sources: Indenture (Egalet Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i1) The Company shall Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; , and (ii2) the Company shall Issuer will not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding Issuer and its Restricted Subsidiaries, calculated as of 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 determined or greater (“Ratio Debt”); 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) $250 million and (y) 5.25% of Total Assets, at any one time outstanding, 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 foregoing limitations set forth in Section 4.03(a) shall will not apply to:to (collectively, “Permitted Debt”):
(i) the Incurrence by the Company Issuer or its Restricted Subsidiaries of Indebtedness under any Credit Agreement, the Credit Agreement 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 outstanding principal amount outstanding not to exceed the sum of (1) (x) $1,075 million plus (y) an unlimited amount so long as the Consolidated Senior Secured Debt Ratio does not exceed 3.00 to 1.00 (with any Indebtedness Incurred under subclause (x) hereof on the date of determination of the Consolidated Senior Secured Debt Ratio not being included in the calculation of the Consolidated Senior Secured Debt Ratio under this subclause (y) on such date but not, for the avoidance of doubt, excluded from any such calculation made on any such subsequent date), plus (2) up to an aggregate amount not to exceed at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) outstanding, the greater of (x) $50.0 550 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence Borrowing Base as of the date of such Indebtedness Incurrence, less, in each case of this clause (and application of the net proceeds therefrom2), the aggregate amount under Receivables Financings incurred by a Receivables Subsidiary; provided that solely for the purpose of calculating the Consolidated First-Lien Senior Secured Debt Ratio would under this clause (i), any outstanding Indebtedness Incurred under this clause (i) that is unsecured or secured on a junior basis shall nevertheless be no greater than 2.375 deemed to 1.00be secured by a Lien;
(ii) the Incurrence by the Company Issuer and the Guarantors of Indebtedness represented by (x) the Securities Notes (not including any Additional SecuritiesNotes) and the Existing First-Lien Guarantees thereof, as applicable, and (y) the 2021 Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien notes issued under the 2021 Notes issued after the Existing First-Lien Issue DateIndenture) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof);applicable
(aiii) Indebtedness of the Issuer and its Restricted Subsidiaries existing on the Existing First-Lien Issue Closing Date (after giving effect to the Transactions) (other than Indebtedness described in clauses clause (i) and or (ii) of this Section 4.03(babove)) and (b) [reserved];
(aiv) Indebtedness (including including, without limitation, Capitalized Lease ObligationsObligations and mortgage financings as purchase money obligations) Incurred by the Company Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any of its Restricted Subsidiaries of the Company to finance (whether prior to all or within 270 days after) any part of the purchase, lease, construction construction, installation, repair or improvement of property (real or personal) ), plant or equipment or other fixed or capital assets (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; Indebtedness arising from the conversion of the obligations of the Issuer or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of the Issuer or such Restricted Subsidiary, in an aggregate principal amount whichor liquidation preference, when aggregated with the principal amount of including all other Indebtedness, Indebtedness Incurred and Disqualified Stock and or Preferred Stock then outstanding that was issued to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), does not to exceed the greater of (x) $75.0 175 million and 5.0(y) 3.75% of Total Assets Assets, at any one time outstanding, plus, in the time case of Incurrenceany refinancing of any Indebtedness permitted under this clause (iv) or any portion thereof, the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums and other costs and expenses incurred in connection with such refinancing (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock Incurred pursuant to this clause (iv) shall cease to be deemed Incurred or outstanding pursuant to this clause (iv) but shall be deemed Incurred and outstanding as Ratio Debt from and after the first date on which the Issuer or such Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness, Disqualified Stock or Preferred Stock as Ratio Debt (to the extent the Issuer or any of its Restricted Subsidiaries are able to Incur any Liens related thereto as Permitted Liens after such reclassification)); provided that Capitalized Lease Obligations incurred by the Issuer or any Restricted Subsidiary pursuant to this clause (iv) in connection with a Sale/Leaseback Transaction shall not be subject to the foregoing limitation so long as the proceeds of such Sale/Leaseback Transaction are used by the Issuer or such Restricted Subsidiary to permanently repay outstanding loans under any Credit Agreement or other Indebtedness secured by a Lien on the assets subject to such Sale/Leaseback Transaction;
(v) Indebtedness Incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and or bank guarantees or similar instruments issued in the ordinary course of business, including including, without limitation limitation, (x) letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits to employees (whether current or former employees or their families former) 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 reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and (y) guarantees of Indebtedness Incurred by customers in connection with the purchase or other acquisition of equipment or supplies in the ordinary course of business;
(vi) Indebtedness arising from agreements of the Company Issuer or a its Restricted Subsidiary Subsidiaries providing for indemnification, earn-outs, adjustment of purchase or acquisition price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any (x) such Indebtedness owed owing to a Restricted Non-Guarantor Subsidiary that is neither Finance Co. nor a Guarantor is shall be subordinated in right of payment to the obligations of Issuer’s Obligations with respect to the Company under the Securities; provided, further, that Notes and (y) any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such IndebtednessIndebtedness not permitted by this clause (vii);
(viii) 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 Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred StockStock not permitted by this clause (viii);
(ix) Indebtedness of a Restricted Subsidiary owing to the Company Issuer or another Restricted Subsidiary; provided that (x) if Finance Co. or a Guarantor Incurs such Indebtedness owing to a Restricted Subsidiary that is neither Finance Co. nor a Non-Guarantor Subsidiary, such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee of such Guarantor, as applicable; provided, further, that and (y) any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary holding lending such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such IndebtednessIndebtedness not permitted by this clause (ix);
(x) Hedging Obligations that are Swap Contracts or Cash Management Services Incurred not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or salespurposes;
(xi) obligations (including reimbursement obligations with respect to letters of credit and or bank guaranteesguarantees or similar instruments) in respect of self-insurance, performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company Issuer or any Restricted Subsidiary in the ordinary course of businessSubsidiary;
(xii) Indebtedness or Disqualified Stock of the Company Issuer or any Restricted Subsidiary of the Company and Preferred Stock of any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference that, 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 (x) $100.0 275 million and (y) 5.75% of Total Assets, at any one time outstanding outstanding, plus, in the case of any refinancing of any Indebtedness permitted under this clause (xii) or any portion thereof, the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums and other costs and expenses incurred in connection with such refinancing (it being understood that any Indebtedness Indebtedness, Disqualified Stock or Preferred Stock Incurred under pursuant to this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of pursuant to this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a) and outstanding as Ratio Debt from and after the first date on which the Company, Issuer or the such Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause Indebtedness, Disqualified Stock or Preferred Stock as Ratio Debt (xiito the extent the Issuer or any of its Restricted Subsidiaries are able to Incur any Liens related thereto as Permitted Liens after such reclassification));
(xiii) any guarantee (or co-issuance in by the case of Finance Co.) by an Issuer or a Guarantor Restricted Subsidiary of Indebtedness or other obligations of the Company Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred or other obligations by such 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 Securities or the Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of the Issuer or a Restricted Subsidiary of the Company which that serves to refund, refinance refinance, replace, redeem, repurchase, retire or defease defease, and is in an aggregate principal amount (or if issued with original issue discount an aggregate issue price) that is equal to or less than, Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as Ratio Debt or permitted under clause (ii), (iii), this clause (xiv), (xv) or (xviii) of this Section 3.3 or subclause (y) of each of clauses (iv), (xii), (xx), (xxix) or (xxx) of this Section 3.3 (provided that any amounts incurred under this clause (xiv) as Refinancing Indebtedness of subclause (y) of these clauses shall reduce the amount available under such subclause (y) of such clauses) so long as such Refinancing Indebtedness remains outstanding or any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(a) and clauses (ii), (iii)(a), (iv), (xiv), (xv), (xix) and/or (xx) of this Section 4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund refund, replace, refinance, redeem, repurchase, retire or refinance defease such Indebtedness, Disqualified Stock or Preferred Stock, including plus any Indebtedness, additional Indebtedness Incurred or Disqualified Stock or Preferred Stock Incurred issued to pay unpaid accrued interest and the aggregate amount of premiums (including reasonable tender premiums), and underwriting discounts, defeasance costs and fees and expenses in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which that 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 refunded, refinanced, replaced, redeemed, repurchased or 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 Securitiesretired;
(2) in the case of any revolving Indebtedness, has a Stated Maturity which is not no earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded refunded, refinanced, replaced, redeemed, repurchased or refinanced or (y) 91 days following the maturity date of the Securitiesretired;
(3) to the extent that such Refinancing Indebtedness refinances (ai) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicableSubordinated Indebtedness, such Refinancing Indebtedness is junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, Subordinated Indebtedness or (bii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;, respectively; and
(4) 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 Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Non-Guarantor Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Company that is neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer or a Restricted Subsidiary that is a Guarantor, or (y) Indebtedness or Disqualified Stock of the Company Issuer or Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that refinances Indebtedness Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; and
(6) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, provided that (A) subclauses subclause (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereofany Secured Indebtedness;
(xvi) Indebtedness, Disqualified Stock or Preferred Stock (x) of (a) the Company Issuer or any of its Restricted Subsidiaries, Subsidiaries Incurred to finance or assumed in connection with an acquisition of any assets (including Capital Stock), business or Person and (by) Persons of any Person that are is acquired by the Company Issuer or any of its Restricted Subsidiaries or merged into or consolidated or amalgamated into with the Company Issuer or a Restricted Subsidiary in accordance with the terms of this IndentureIndenture and (ii) Indebtedness Incurred or assumed in anticipation of an acquisition of any assets, business or Person; provided, however, that after giving pro forma effect to such acquisition acquisition, merger, consolidation or amalgamation and the Incurrence of such Indebtedness Indebtedness, Disqualified Stock or Preferred Stock, either:
(1) the Company Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage as Ratio test set forth in the first sentence of Section 4.03(a)Debt; or
(2) the Fixed Charge Coverage Ratio would be of the Issuer is equal to or greater than immediately prior to such acquisition, merger, consolidation 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 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;
(xviiixvii) Indebtedness of the Company Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreementany credit facility permitted hereunder, so long as such letter of credit has not been terminated and is in a principal amount not in excess of the stated amount of such letter of creditcredit or bank guarantee;
(xixxviii) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxixix) Indebtedness of the Company 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;
(xxiixx) 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 of Non-Guarantor Subsidiaries in an aggregate principal amount not to exceed the criteria greater of more than (x) $250 million and (y) 5.25% of Total Assets, at any one of the categories of permitted Indebtedness described in clauses time outstanding (i) through (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Faciit being
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company shall UK Holdco will not, and shall will not permit any of its the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall UK Holdco will not permit any of its the Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer UK Holdco and any of the Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary Subsidiaries may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any of the Restricted Subsidiary Subsidiaries may issue shares of Preferred Stock, in each case case, if either (A) the Fixed Charge Interest Coverage Ratio of the Company for the most recently ended four full fiscal quarters Reference Period is at least 2.00 to 1.00 or (B) the Total Net Leverage Ratio for which internal financial statements are available immediately preceding the date most recently ended Reference Period does not exceed 6.50 to 1.00 (any such debt incurred pursuant to this proviso, “Ratio Debt”), in each case determined on which such additional a Pro Forma Basis; provided, further, however, that the aggregate principal amount of Indebtedness is (excluding Acquired Indebtedness not Incurred in connection with or such in contemplation of the applicable merger, acquisition or other similar transaction) that may be Incurred and Disqualified Stock or Preferred Stock is that may be issued would have been at least 2.00 pursuant to 1.00 determined on a pro forma basis this clause (including a pro forma application a) by Restricted Subsidiaries that are not Borrowers or Guarantors, taken together with the principal amount of the net proceeds therefrom), as if the additional all such Indebtedness had been Incurred, or the Incurred and Disqualified Stock or Preferred Stock had been issued, as issued by Restricted Subsidiaries that are not Borrowers or Guarantors outstanding pursuant to paragraph (1) of the case may be, final proviso to clause (b)(vi) and the application final proviso to clause (b)(xxii)(x) of proceeds therefrom had occurred this Section 7.2, shall not exceed the greater of $125,000,000 and 39% of Consolidated EBITDA as of the most recently ended Reference Period at the beginning of such four-quarter periodany one time outstanding.
(b) The limitations set forth in Section 4.03(a7.2(a) shall not apply to:to (collectively, “Permitted Debt”):
(i) the Incurrence by the Company Indebtedness Incurred pursuant to this Agreement, any other Loan Document or its Restricted Subsidiaries of any Loan Note Instrument (including any Indebtedness under the Credit Agreement and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed incurred pursuant to have a principal amount equal to the face amount thereof) up to an aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such thatSection 2.25, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom2.26 or 2.28), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company Borrowers and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Senior Secured Notes issued on the Existing First-Lien Issue Closing Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Datenotes) and the guarantees thereofguarantees, as applicable (including the exchange securities and related guarantees thereof)applicable;
(aiii) Indebtedness existing on the Existing First-Lien Issue Closing Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (iSection 7.2(b)(i) and (ii)) (in the case of any individual item of Indebtedness in a principal amount in excess of $5,000,000, to be set forth on Schedule 7.2);
(iv) Permitted First Priority Refinancing Debt and Permitted Second Priority Refinancing Debt;
(v) Permitted Unsecured Refinancing Debt;
(vi) Indebtedness, Disqualified Stock or Preferred Stock (“Incremental Equivalent Debt”) not to exceed an amount equal to the sum of (x) an unlimited amount at any time so long as (A) in the case of Indebtedness that is secured by a Lien on the Collateral on a pari passu basis with the Obligations, the First Lien Net Leverage Ratio for the most recently ended Reference Period does not exceed 5.00 to 1.00, (B) in the case of Indebtedness that is secured by a Lien on the Collateral other than on a pari passu basis with the Obligations, the Secured Net Leverage Ratio for the most recently ended Reference Period does not exceed 6.50 to 1.00 or (C) in the case of Indebtedness that is unsecured or is secured by a Lien on assets that do not constitute Collateral, and in the case of Disqualified Stock or Preferred Stock, either (1) the Total Net Leverage Ratio for the most recently ended Reference Period does not exceed 6.50 to 1.00 or (2) the Interest Coverage Ratio for the most recently ended Reference Period is at least 2.00 to 1.00, in each case on a Pro Forma Basis (but without giving effect to the cash proceeds of any such Indebtedness remaining on the balance sheet and calculated assuming that any such Indebtedness is fully drawn throughout such period), plus (y) the amount of all prior voluntary prepayments, loan buybacks (with credit given to the principal amount thereof) and commitment reductions of Term Loans, Revolving Loans, Incremental Loans, Indebtedness incurred pursuant to this Section 7.2(b)(vi) that is secured by a Lien on the Collateral on a pari passu basis with the Obligations and Permitted Credit Agreement Refinancing Debt and Refinancing Indebtedness previously applied to the permanent repayment of any of the foregoing and the amount of any prepayments made to any Lender pursuant to Section 2.23, with any replacement of a Lender pursuant thereto being deemed, solely for this purpose, to constitute a prepayment (in each case, to the extent not funded with the proceeds of long-term Indebtedness (except Indebtedness under one or more revolving credit or similar facilities) or the proceeds of Permitted Cure Securities applied pursuant to Section 9.4 and, with respect to any prepayment or commitment reduction of or in respect of revolving loans, to the extent accompanied by a permanent reduction in such revolving commitments) (minus the aggregate principal amount of Indebtedness Incurred under Section 2.25(a)(i)(y)), plus (z) an amount equal to the greater of $325,000,000 and 100% of Consolidated EBITDA on a Pro Forma Basis as of the most recently ended Reference Period (and after giving effect to any acquisition or other transaction consummated concurrently therewith) (minus the aggregate outstanding principal amount of Indebtedness Incurred under Section 2.25(a)(i)(z)) (provided that, for the avoidance of doubt, the amount available to the Borrowers pursuant to clauses (y) and (z) above shall be available at all times and shall not be subject to any ratio test described in foregoing clause (x) above), which amount may be secured on a pari passu or junior basis; provided, that:
(1) the principal amount of such Indebtedness (excluding Acquired Indebtedness not Incurred in connection with or in contemplation of the applicable merger, acquisition or other similar transaction) that may be Incurred and Disqualified Stock or Preferred Stock that may be issued pursuant to this clause (vi) by Restricted Subsidiaries that are not Borrowers or Guarantors, shall not exceed the greater of $125,000,000 and 39% of Consolidated EBITDA as of the most recently ended Reference Period at any one time outstanding (minus the outstanding principal amount of such Indebtedness Incurred by Restricted Subsidiaries that are not Borrowers or Guarantors pursuant to the second proviso to clause (a) and the final proviso to clause (b)(xxii)(x) of this Section 4.03(b7.2);
(2) the Applicable Requirements shall have been satisfied;
(3) no Indebtedness under this clause (vi) may be Incurred at any time that an Event of Default has occurred and is continuing (bunless such Indebtedness is used to finance, in whole or in part, a Limited Condition Transaction, in which case the absence of an Event of Default shall be tested on the date specified in Section 1.4);
(4) any such Indebtedness in the form of Dollar denominated broadly syndicated term “B” loans Incurred under this clause (vi) that is secured by a Lien on the Collateral on a pari passu basis with the Obligations shall be subject to the MFN Provision set forth in Section 2.25(a)(vii) (giving effect to all exceptions thereto, mutatis mutandis for Incremental Equivalent Debt);
(5) [reserved];; and
(a6) (A) for the avoidance of doubt, if the applicable Borrower incurs Indebtedness under clause (x) above on the same date that it incurs Indebtedness under clauses (y) or (z) above, then the applicable incurrence ratio will be calculated with respect to such incurrence under clause (x) without regard to any incurrence of Indebtedness under clauses (y) or (z) and (B) unless the applicable Borrower elects otherwise, any Indebtedness incurred pursuant to this clause (vi) shall be deemed incurred first under clause (x) above, with the balance incurred under clauses (y) and (z) above.
(vii) Indebtedness (including including, without limitation, Capitalized Lease Obligations, mortgage financings or purchase money obligations) Incurred by the Company UK Holdco or any of its the Restricted Subsidiaries, Disqualified Stock issued by the Company UK Holdco or any of its the Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries to finance all or any part of the Company to finance (whether prior to or within 270 days after) the acquisition, purchase, lease, construction construction, design, installation, repair, replacement or improvement of property (real or personal) ), plant or equipment or other fixed or capital assets used or useful in the business of UK Holdco or the Restricted Subsidiaries or 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 amount whichamount, when aggregated with the principal amount of including all other IndebtednessIndebtedness Incurred to renew, Disqualified Stock and Preferred Stock then outstanding that was refund, Refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clause (ivvii), does not to exceed the greater of $75.0 million 150,000,000 and 5.047% of Total Assets Consolidated EBITDA as of the most recently ended Reference Period at any one time outstanding (minus amounts incurred and outstanding under clause (xvi) in respect of Indebtedness originally incurred under this clause (vii)); provided, that Capitalized Lease Obligations incurred by UK Holdco or any Restricted Subsidiary pursuant to this clause (vii) in connection with a Sale Leaseback Transaction shall not be subject to the time foregoing limitation so long as the proceeds of Incurrencesuch Sale Leaseback Transaction are used by UK Holdco or such Restricted Subsidiary to permanently repay outstanding loans under any credit agreement, debt facility or other Indebtedness secured by a Lien on the assets subject to such Sale Leaseback Transaction;
(vviii) Indebtedness Incurred by (x) in respect of any bankers’ acceptance, bank guarantees, discounted ▇▇▇▇ of exchange or the Company discounting or any factoring of its Restricted Subsidiaries receivables, warehouse receipt or similar facilities, and reinvestment obligations related thereto, entered into in the ordinary course of business and (y) 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, however, that upon the drawing of such letters of credit or the Incurrence of such Indebtedness, such obligations are reimbursed within 45 days following such drawing;
(viix) Indebtedness arising from agreements of the Company UK Holdco or a Restricted Subsidiary providing for indemnification, adjustment of purchase price price, earnout or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company UK Holdco in accordance with the terms of this IndentureAgreement, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viiix) shares of Preferred Stock of a Restricted Subsidiary issued to the Company UK Holdco 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 UK Holdco or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(a), (iv), (xiv), (xv), (xix) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Faci
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 the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its the Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer the Company and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company or its the Restricted Subsidiaries of Indebtedness under the 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) up to an aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) an aggregate principal amount of $200.0 1,500.0 million and (2) an aggregate principal amount of Secured Indebtedness (with all Indebtedness Incurred under this clause (a) being deemed Secured Indebtedness for purposes of making the Borrowing Base; plus
(2determination hereunder) outstanding at any one time that does not cause the greater Secured Indebtedness Leverage Ratio of (x) $50.0 million and (y) an amount such thatthe Company to exceed 3.50 to 1.00, determined on a pro forma basis after giving effect to the incurrence of such Indebtedness (and including a pro forma application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company and the Guarantors of Indebtedness represented by the Original Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofGuarantees, as applicable (including the Exchange Securities issued in exchange securities for Initial Securities and related guarantees thereof);
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) , and (b) [reserved]subject to the following paragraph), including the Existing Notes and the guarantees thereof;
(iv) (a) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company or any of its the Restricted Subsidiaries, Disqualified Stock issued by the Company or any of its the 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, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount whichthat, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 150.0 million and 5.04.5% of Total Assets at the time of Incurrence;
(v) Indebtedness 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 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;
(vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Acquisition Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; 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 of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) 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 neither Finance Co. nor not a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee of such Guarantor, as applicable; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which 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 that are not Incurred for speculative purposes andand are either: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed the greater of $100.0 75.0 million and 2.25% of Total Assets at any one the time outstanding 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 (or co-issuance in x) the case of Finance Co.) by an Issuer Company or a Guarantor of Indebtedness or other obligations of the Company or any of its the Restricted Subsidiaries or (y) a Foreign Subsidiary of Indebtedness or other obligations of another Foreign Subsidiary, in each case so long as the Incurrence of such Indebtedness Incurred by such Issuer 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company or any of its the Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company which 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)(aiii), (iv), (xiv), (xv), (xix) and/or and (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 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”) prior to its respective maturity; 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 last maturity date of any Securities then outstanding were instead due on such date one year following the last maturity date of such Securities (provided that any Refinancing Indebtedness Incurred in reliance on this subclause (1)(y) does not provide for any scheduled principal payments prior to the maturity date of the SecuritiesSecurities in excess of, or prior to, the scheduled principal payments due prior to such maturity for the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased);
(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 last maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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, expenses, costs and fees and expenses Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is neither Finance Co. nor not a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xixxx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xixxx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xixxx) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (32) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Bank Indebtedness constituting First-First Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;Obligations.
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (ax) the Company or any of its the Restricted Subsidiaries, Subsidiaries Incurred to finance an acquisition or (by) Persons that are acquired by the Company or any of its 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 pro forma effect to such acquisition 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 (x) greater than immediately prior to such acquisition, merger or amalgamation and (y) equal to or greater than 1.75 to 1.00;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution IndebtednessIndebtedness 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 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), as determined in accordance with clauses (B) and (C) of 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 4.04(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof);
(xx) Indebtedness of Foreign Subsidiaries Subsidiaries; provided, however, that the aggregate principal amount of Indebtedness Incurred for working capital purposes;
under this clause (xxi) xx), when aggregated with the principal amount of all other 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; and
(xxii) Indebtedness issued by the Company or a Restricted Subsidiary to current or former officers, directors then outstanding 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 the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(athis clause (xx), does not exceed the Company shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item greater of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Faci$1
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company Issuer shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Consolidated Leverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 Issuer does not exceed 3.5 to 1.00 1.0 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock 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 period for which the EBITDA component of the Consolidated Leverage Ratio calculation is being measured.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company Issuer or its any Restricted Subsidiaries Subsidiary of Indebtedness under the a 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) up to an in the aggregate principal amount outstanding at any one time time, taken together with the aggregate principal amount of Indebtedness outstanding pursuant to clauses (xvi) and (xxvii), not to exceed:
(1) an amount equal to the greater of (1) exceed $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.0020,000,000 at any one time outstanding;
(ii) the Incurrence by any of the Company Issuer and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof)Guarantees;
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and any Guarantor’s guarantee thereof (bwhether or not such guarantee existed on the Issue Date) [reserved]which, for the avoidance of doubt, shall include the Interim Payments Note;
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Issuer or any of its Restricted SubsidiariesSubsidiary, and Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company Subsidiary, to finance (whether prior to or within 270 days after) the purchaseacquisition, lease, construction construction, repair, replacement or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount whichthat, when aggregated with the principal amount of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence10,000,000;
(v) Indebtedness 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 authoritiesGovernmental Authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims;
(vi) Indebtedness arising from agreements of the Company Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligationsobligations (including earn-out obligations and other contingent consideration), in each case, Incurred or assumed in connection with the Transactions or any acquisition or disposition of any business, any assets or a Subsidiary of the Company Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person (other than the Issuer or a Restricted Subsidiary) acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) 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 neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed 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 (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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(a), (iv), (xiv), (xv), (xix) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Faci
Appears in 1 contract
Sources: Indenture (Egalet Us 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, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer the Company and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the 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) up to an in the aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal to exceed the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater sum of (x) $50.0 805.0 million and plus (y) an amount aggregate additional principal amount, if any, of Indebtedness (for purposes of this clause (y) only, treating all Indebtedness then outstanding under this clause (i) together with such that, Indebtedness to be Incurred as Secured Indebtedness) that does not cause the Secured Indebtedness Leverage Ratio of the Company to exceed 3.50 to 1.00 determined on a pro forma basis after giving effect to the incurrence of such Indebtedness (and including a pro forma application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company Issuers and the Guarantors of Indebtedness represented by (i) the Original Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofGuarantees, as applicable (including the exchange securities Exchange Securities and related guarantees thereof) and (ii) the Existing 2014 Notes (not including any 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 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);
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(aiv) Indebtedness (including Capitalized Lease Obligations) 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, construction construction, repair, replacement or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 100.0 million and 5.04.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Apollo Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) 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 owed to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; 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 of such IndebtednessIndebtedness not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred StockStock not permitted by this clause (viii);
(ix) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor 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 Restricted Subsidiaries), such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 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 (ix);
(x) Hedging Obligations that are not Incurred incurred for speculative purposes and: but (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed the greater of $100.0 million and 4.0% of Total Assets at any one time outstanding (it being understood that any Indebtedness Incurred under 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));
(xiii) any guarantee (or co-issuance in by the case of Finance Co.) by an Issuer 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 such Issuer 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which 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)(aiii), (iv), (xii), (xiv), (xv), (xix) and/or ), (xx) and (xxiii) 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 any additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums), fees, expenses and fees defeasance costs in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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 or 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 one year following the last date of maturity of the Securitiesdate;
(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 (y) 91 days following the last maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiarya Guarantee, as applicable, such Refinancing Indebtedness is junior junior, as applicable, to the Securities or the Note Guarantee of such Restricted Subsidiarya Guarantee, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;
(4) 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 (including tender premium), fees fees, expenses and expenses defeasance costs Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is neither Finance Co. nor not a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv), (xii), (xix), (xx) or (xixxxiii) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv), (xii), (xix), (xx) or (xixxxiii) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv), (xii), (xix), (xx) or (xixxxiii) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (32) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereofBank Indebtedness;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (ax) the Company or any of its Restricted Subsidiaries, Incurred Subsidiary incurred to finance an acquisition or (by) Persons that are acquired by the Company or any of its Restricted 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, however, that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger, consolidation or amalgamation 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 acquisitionacquisition or merger, consolidation 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 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 the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Subsidiaries; provided that the aggregate principal amount of Indebtedness Incurred for working capital purposes;
under this clause (xxi) xx), when aggregated with the principal amount or liquidation preference of all other 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; and
(xxii) Indebtedness issued by the Company or a Restricted Subsidiary to current or former officers, directors then outstanding 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 the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(athis clause (xx), does not exceed the Company shall, in its sole discretion, divide, classify greater of $50.0 million and 2.5% of Total Assets at any one time outstanding (it being understood that any Indebtedness incurred pursuant to this clause (xx) shall cease to be deemed Incurred or reclassify, or later divide, classify or reclassify, such item outstanding for purposes of Indebtedness or any portion thereof in any manner that complies this clause (based on circumstances existing at the time of such division, classification or reclassificationxx) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Facibut shall be deemed Incurred for pu
Appears in 1 contract
Sources: Indenture (RBS Global Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company Issuer shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Consolidated Leverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued Issuer would have been at least 2.00 less than or equal to 1.00 4.0 to 1.0 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, 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 period for which the Consolidated Leverage Ratio calculation is being performed.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company Issuer or its Restricted Subsidiaries of Indebtedness under the a 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) up to an in the aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal to exceed the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater sum of (x) $50.0 million and 25,000,000 plus (y) an amount aggregate additional principal amount, if any, of Indebtedness (for purposes of this clause (y) only, treating all Indebtedness then outstanding under this clause (i) together with such that, Indebtedness to be Incurred as Secured Indebtedness) that does not cause the Secured Indebtedness Leverage Ratio of the Issuer to exceed 3.5 to 1.0 determined on a pro forma basis after giving effect to the incurrence of such Indebtedness (and including a pro forma application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by any of the Company Issuer and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof)Guarantees;
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Issuer or any Restricted Subsidiary of its Restricted Subsidiariesthe Issuer, and Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries Subsidiary of the Company Issuer, to finance (whether prior to or within 270 days after) the purchaseacquisition, lease, construction construction, repair, replacement or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount whichthat, when aggregated with the principal amount of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence10,000,000;
(v) Indebtedness 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 authoritiesGovernmental Authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims;
(vi) Indebtedness arising from agreements of the Company Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, any assets or a Subsidiary of the Company Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person (other than the Issuer or a Restricted Subsidiary of the Issuer) acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor is subordinated in right of payment to the obligations of the Company Issuer under the Securities; 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) shall be deemed, in each case, to be an Incurrence of such IndebtednessIndebtedness not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company Issuer or another Restricted Subsidiarya Guarantor; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary Guarantor that holds such shares of Preferred Stock of another a Restricted Subsidiary ceasing to be a Restricted Subsidiary Guarantor or any other subsequent transfer of any such shares of Preferred Stock (except to the Company Issuer or another Restricted Subsidiarya Guarantor) shall be deemed, in each case, to be an issuance of shares of Preferred StockStock not permitted by this clause (viii);
(ix) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted SubsidiarySubsidiary of the Issuer; provided provided, that if Finance Co. or a Guarantor Incurs incurs such Indebtedness to a Restricted Subsidiary of the Issuer that is neither Finance Co. nor not a Guarantor Guarantor, such Indebtedness is expressly subordinated in right of payment to the Guarantee of the Securities (in the case of Finance Co.) or the Note Guarantee of such Guarantor, as applicable; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary of the Issuer holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted SubsidiarySubsidiary of the Issuer 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 (ix);
(x) Hedging Obligations of the Issuer or any Restricted Subsidiary that are not Incurred incurred for speculative purposes andbut: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(xii) Indebtedness or Disqualified Stock of the Company Issuer or any Restricted Subsidiary of the Company and Preferred Stock of any Restricted Subsidiary of the Company Issuer not otherwise permitted hereunder under this Indenture in an aggregate principal amountamount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million 20,000,000 at any one time outstanding (it being understood that any Indebtedness Incurred under 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 CompanyIssuer, or the Restricted SubsidiarySubsidiary of the Issuer, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii));
(xiii) any guarantee (or co-issuance in by the case of Finance Co.) by an Issuer or a Guarantor Restricted Subsidiary of the Issuer of Indebtedness or other obligations of the Company Issuer or any other Restricted Subsidiary of its Restricted Subsidiaries the Issuer so long as the Incurrence of such Indebtedness Incurred by such the Issuer or such other Restricted Subsidiary of the Issuer 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 Note Guarantee of such Restricted Subsidiarya Guarantor, 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 Guarantee with respect to the Securities, as applicable, Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Guarantee of such Restricted SubsidiaryGuarantor, as applicable;
(xiv) the Incurrence by the Company Issuer or any of its Restricted Subsidiaries Guarantor of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company which Guarantor 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)(aiii), (iv), (xii), (xiv), (xv), (xix), (xxi), (xxiv) and/or and (xxxxv) of this Section 4.03(b) or any Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock, including any Indebtedness, additional Indebtedness or Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums), fees, expenses and fees defeasance costs in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, provided that such Refinancing Indebtedness:
(1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which that is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Indebtedness or Disqualified Stock being refunded, refinanced or Preferred Stock being refunded or refinanced defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock being refunded or 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 one year following the last date of maturity of the Securitiesdate;
(2) has a Stated Maturity which that 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 Stated Maturity of the Securities;
(3) to the extent such Refinancing Indebtedness refunds, refinances or defeases (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiarya Guarantee, as applicable, such Refinancing Indebtedness is junior to the Securities or the Note Guarantee of such Restricted Subsidiarya Guarantee, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;
(4) 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 refunded, refinanced or defeased plus premium (including tender premium), fees fees, expenses and expenses defeasance costs Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is neither Finance Co. nor Issuer or a Guarantor that refunds, refinances Indebtedness of an Issuer or a Restricted Subsidiary that is a Guarantor, or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances defeases Indebtedness of an Unrestricted Subsidiary; and
(6) in the case of any Refinancing Indebtedness Incurred to refund, refinance or defease Indebtedness outstanding under clause (iv), (xii), (xix), (xxi), (xxiv) or (xixxxv) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv), (xii), (xix), (xxi), (xxiv) or (xixxxv) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses clause (iv), (xii), (xix), (xxi), (xxiv) or (xixxxv) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of (ax) the Company Issuer or any of its Restricted Subsidiaries, Incurred Guarantor incurred to finance an acquisition of any property or assets or (by) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiaries Guarantor or merged merged, consolidated or amalgamated with or into the Company Issuer or a Restricted Subsidiary Guarantor in accordance with the terms of this Indenture; providedprovided that, howeverin each case, that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger, consolidation or amalgamation either:
(1) the Company Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Consolidated Leverage Ratio test set forth in the first sentence of Section 4.03(a); or
(2) the Fixed Charge Coverage Consolidated Leverage Ratio would be greater less than immediately prior to such acquisitionacquisition or merger, consolidation or amalgamation;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company Issuer 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 Incurrence;
(xviii) Indebtedness of the Company Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the a Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit, to the extent such letter of credit or bank guarantee issued pursuant to such Credit Agreement is otherwise permitted by this Section 4.03;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) Indebtedness of the Company 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;
(xxi) Indebtedness of the Issuer or any Guarantor Incurred in connection with an Investment in, or representing guarantees of Indebtedness of, joint ventures of the Issuer or any Guarantor in an aggregate principal amount, at any one time outstanding, not to exceed $1,000,000 at the time of Incurrence;
(xxii) Indebtedness issued by of the Company or a Restricted Subsidiary to current or former officers, directors and employees thereof Issuer or any direct Guarantor issued to (x) any joint venture (regardless of the form of legal entity) that is not a Subsidiary or indirect parent thereof, or their respective estates, spouses or former spouses(y) any Unrestricted Subsidiary, in each case arising in the ordinary course of business in connection with the cash management operations (including with respect to finance intercompany self-insurance arrangements) of the Issuer or any Guarantor;
(xxiii) the Incurrence by the Issuer or any Guarantor of Subordinated Indebtedness (excluding such Indebtedness convertible into the Capital Stock of the Issuer) with a Stated Maturity and, if applicable, a First Amortization Date no earlier than 91 days following the Stated Maturity of the Securities;
(xxiv) Indebtedness Incurred by the Issuer or any Restricted Subsidiary of the Issuer, whether prior to or within 270 days after the acquisition, construction, repair, replacement or improvement of real property or related fixtures and equipment, for the purpose of financing all or part of the purchase price thereof or redemption of Equity Interests cost of the Company construction, repair, replacement or improvement thereof, in each case after the Issue Date, in an aggregate principal amount that, when aggregated with the principal amount of all other Indebtedness then outstanding that was Incurred pursuant to this clause (xxiv), does not exceed $25,000,000; and
(xxv) unsecured Indebtedness convertible into the Capital Stock of the Issuer with a Stated Maturity and, if applicable, a First Amortization Date no earlier than 91 days following the Stated Maturity of the Securities in an aggregate principal amount not to exceed $200,000,000 at any one time outstanding (less the outstanding aggregate principal amount of any of its direct or indirect parent companies the Convertible Notes (and any permitted refinancings of the Convertible Notes pursuant to the extent permitted under Section 4.04(b)(iv4.03(b)(xiv))). For purposes of determining compliance with this Section 4.03, :
(1) in the event that an item, item of Indebtedness or a portion of such item, taken by itself, of Indebtedness, Disqualified Stock (or Preferred Stock any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (i) through (xxiixxv) above of this Section 4.03(b) or such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a), the Company shallIssuer may, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies Disqualified Stock (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Facia
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Holdings and the Company shall not, and shall not permit any of its the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:to (collectively, “Permitted Debt”):
(i) the Incurrence by the Company Holdings or its Restricted Subsidiaries of Indebtedness under the 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) up to an aggregate principal amount not to exceed $368.0 million outstanding at any one time not to exceed:
(1) an amount equal to time, less the greater sum of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater amounts of (x) $50.0 million all permanent reductions of Indebtedness thereunder as a result of principal payments actually made (A) with Net Cash Proceeds from Asset Sales, (B) as Amortization Payments and (C) under excess cash flow mandatory prepayment provisions under the Credit Agreement, plus (y) an amount such that, on all permanent reductions in revolving credit commitments under the Credit Agreement other than in connection with a pro forma basis after giving effect to the incurrence of such Indebtedness (and application substantially concurrent refinancing or replacement of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00amount so reduced;
(ii) the Incurrence by Holdings, the Company and the Subsidiary Guarantors of Indebtedness represented by the Securities Notes (not including PIK Notes and any Additional Securitiesincreased principal amount of Notes as payment for PIK Interest) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofGuarantees, as applicable (including the exchange securities and related guarantees thereof)applicable;
(aiii) (A) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i), (ii) and subclause (iiB) of this clause (iii) of this Section 4.03(b)), including without limitation any Existing Notes (and guarantees thereof) that remain outstanding on the Issue Date after giving effect to the Refinancing Transactions (provided that with respect to any such Indebtedness, other than any Existing Notes, in excess of $1.0 million individually and $5.0 million in the aggregate, such Indebtedness is listed on Schedule III); and (bB) [reserved]the Cerberus 3L Notes (and guarantees thereof) in a principal amount not to exceed the sum of (x) $30.0 million plus for the avoidance of doubt (y) any increases in the principal amount of the Cerberus 3L Notes as a result of the payment of payment in kind interest in respect thereof;
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Holdings or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company Holdings 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, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount whichamount, when aggregated with the principal amount of including all other IndebtednessIndebtedness Incurred to renew, Disqualified Stock and Preferred Stock then outstanding that was refund, refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clause (iv), does not to exceed the greater of (x) $75.0 15.0 million and 5.0(y) 0.75% of Total Assets at the time of Incurrence, at any one time outstanding;
(v) Indebtedness Incurred by the Company Holdings 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 limitation, letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits to employees (whether current or former employees or their families former) 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 reimbursement-type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing;
(vi) Indebtedness arising from agreements of the Company Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company Holdings in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Holdings to a Restricted Subsidiary; provided that any such Indebtedness owed to shall be Subordinated Indebtedness and either unsecured or, if secured, secured by a Restricted Subsidiary Lien that is neither Finance Co. nor a Guarantor is subordinated junior in right of payment priority to the obligations of Lien securing the Company under the SecuritiesPermitted Second Lien Obligations; provided, further, and provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, case to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company Holdings or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 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 (and not Incurred for speculative purposes andpurposes) not to exceed $20.0 million at any one time outstanding: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or salespurchases;
(xi) 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 Holdings or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company Holdings or any Restricted Subsidiary of the Company Holdings and Preferred Stock of any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference which, 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 $100.0 15.0 million at any one time outstanding (it being understood outstanding; provided, however, that notwithstanding the foregoing provision, any Unsecured Indebtedness that is pari passu with the Notes in right of payment, or any Secured Indebtedness that is secured with a Lien on the Collateral on a pari passu basis with the Lien securing the Notes Incurred under this clause (xii) shall cease may not exceed $5.0 million at any one time outstanding, and provided further that no Indebtedness that is senior to the Notes in right of payment or is Secured Indebtedness that is secured with a Lien on the Collateral having a senior priority to the Lien securing the Notes may be deemed Incurred or outstanding for purposes of incurred under 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 (or co-issuance in the case of Finance Co.) by an Issuer Holdings or a Guarantor Restricted Subsidiary of Indebtedness or other obligations of the Company Holdings or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred or other obligations by such Issuer 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 Notes or the Note Guarantee 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 Guarantee with respect to the Securities, as applicable, Notes substantially to the same extent as such Indebtedness is subordinated to the Securities Notes or the Note Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company Holdings or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company Holdings which serves to refund, refinance or defease any Indebtedness Incurred or Indebtedness, Disqualified Stock or Preferred Stock issued Incurred as permitted under Section 4.03(a) and clauses (ii), (iii)(aiii)(A), (iv), this clause (xiv), (xv), (xix) and/or xviii), (xx) and (xxii) 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 any additional Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums premiums, 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:
(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 Indebtedness 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 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 Securitiesrefinanced;
(2) has a Stated Maturity which is not no 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 Securitiesrefinanced;
(3) to the extent such Refinancing Indebtedness refinances (ax) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicableSubordinated Indebtedness, such Refinancing Indebtedness is junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, also constitutes Subordinated Indebtedness or (by) 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 sum of (x) the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus (y) the amount of premium, fees and expenses Incurred in connection with such refinancing;; and
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of Holdings that is not the Company that is neither Finance Co. nor or a Guarantor that refinances Indebtedness of an Issuer Holdings, the Company or a Restricted Subsidiary that is a Guarantor, or (y) Indebtedness of the Company Holdings or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(6) in the case of and provided further that any Refinancing Indebtedness Incurred incurred with respect to refinance Indebtedness Existing Notes that remain outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of on the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, Issue Date after giving effect to the extent such refunding or refinancing occurs within one year of Refinancing Transactions must also be Subordinated Indebtedness and otherwise comply with the Stated Maturity thereofprovisions relating to the Existing Notes under Section 4.04(b)(iii);
(xv) Indebtedness, Disqualified Stock or Preferred Stock Stock, not to exceed $30.0 million at any one time outstanding, (x) of (a) the Company Holdings or any of its Restricted Subsidiaries, Subsidiaries Incurred to finance an acquisition or and (by) of Persons that are acquired by the Company Holdings or any of its Restricted Subsidiaries or merged or amalgamated into the Company Holdings or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness Indebtedness, Disqualified Stock or Preferred Stock, 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 of Holdings and its Subsidiaries on a consolidated basis for the first sentence most recently ended four full fiscal quarters for which financial statements are available immediately preceding the date of Section 4.03(asuch acquisition 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 period; or
(2) the Fixed Charge Coverage Ratio of Holdings and its Subsidiaries on a consolidated basis after giving pro forma effect to such acquisition for the most recently ended four full fiscal quarters for which financial statements are available immediately preceding the date of such acquisition would be greater than immediately prior to such acquisition; provided further, however, that (A) any such Indebtedness has a Stated Maturity at least six months later than the Stated Maturity of the Notes and (B) any such Indebtedness of Holdings, the Company or a Guarantor shall either be Unsecured Indebtedness or Secured Indebtedness that is secured with a Lien on the Collateral on a junior basis to the Lien securing the Notes;
(xvi) 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 Incurrence;
(xviiixvii) Indebtedness of the Company Holdings or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of creditcredit or bank guarantee;
(xixxviii) Contribution Indebtedness;
(xxxix) Indebtedness in an aggregate amount not to exceed $25.0 million at any one time outstanding of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) Indebtedness of the Company Holdings or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in the case of each caseof clauses (x) and (y), in the ordinary course of businessbusiness and on an unsecured basis;
(xx) Indebtedness of Foreign Subsidiaries of Holdings in an aggregate amount not to exceed $10.0 million at any one time outstanding;
(xxi) [reserved]; and
(xxii) Indebtedness issued under the Foreign L/C Facility in an aggregate principal amount not to exceed $30.0 million at any time outstanding; provided that such Indebtedness may be recourse to Holdings, but shall not be secured by a Lien on the Company or a Restricted Subsidiary to current or former officersassets of Holdings, 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 the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). Subsidiary Guarantor.
(c) 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, 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 described in clauses (i) through (xxii) above Permitted Debt or such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a), the Company shall, in its sole discretion, at the time of Incurrence, divide, classify or reclassify, or at any later time divide, classify or reclassify, such item of Indebtedness Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof thereof) in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving FaciCredit Agreement outstanding on the Issue Date shall be deemed to have been Incurred pursuant to clause (i) of Section 4.03(b) and all Indebtedness under the Cerberus 3L Notes outstanding on the Issue Date shall be deemed to have been Incurred pursuant to clause (iii)(B) 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 Disqualified Stock or Preferred Stock in the form of additional shares of Disqualified Stock or Preferred Stock of the same class, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies shall not be dee
Appears in 1 contract
Sources: Indenture (Worldwide Recruiting & Staffing Services LLC)
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, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its the Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer the Company and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company or its the Restricted Subsidiaries of Indebtedness under the 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) up to an aggregate principal amount outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) an aggregate principal amount of $200.0 1,500.0 million and (2) an aggregate principal amount of Secured Indebtedness (with all Indebtedness Incurred under this clause (a) being deemed Secured Indebtedness for purposes of making the Borrowing Base; plus
(2determination hereunder) outstanding at any one time that does not cause the greater Secured Indebtedness Leverage Ratio of (x) $50.0 million and (y) an amount such thatthe Company to exceed 3.50 to 1.00, determined on a pro forma basis after giving effect to the incurrence of such Indebtedness (and including a pro forma application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company and the Guarantors of Indebtedness represented by (1) the Original Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofGuarantees, as applicable (including the exchange securities Exchange Securities and guarantees thereof) and (2) the Other Notes issued on the Issue Date under the indentures governing the Other Notes and the related guarantees thereof (including the Other Notes Exchange Securities and guarantees thereof);
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(iv) (a) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company or any of its the Restricted Subsidiaries, Disqualified Stock issued by the Company or any of its the 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, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount whichthat, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 150.0 million and 5.04.5% of Total Assets at the time of Incurrence;
(v) Indebtedness 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 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;
(vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; 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 of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) 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 neither Finance Co. nor not a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee of such Guarantor, as applicable; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which 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 that are not Incurred for speculative purposes andand are either: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed the greater of $100.0 75.0 million and 2.25% of Total Assets at any one the time outstanding 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 (or co-issuance in x) the case of Finance Co.) by an Issuer Company or a Guarantor of Indebtedness or other obligations of the Company or any of its the Restricted Subsidiaries or (y) a Foreign Subsidiary of Indebtedness or other obligations of another Foreign Subsidiary, in each case so long as the Incurrence of such Indebtedness Incurred by such Issuer 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company or any of its the Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company which 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)(aiii), (iv), (xiv), (xv), (xix) and/or and (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 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”) prior to its respective maturity; 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 last maturity date of any Securities then outstanding were instead due on such date one year following the last maturity date of such Securities (provided that any Refinancing Indebtedness Incurred in reliance on this subclause (1)(y) does not provide for any scheduled principal payments prior to the maturity date of the SecuritiesSecurities in excess of, or prior to, the scheduled principal payments due prior to such maturity for the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced or defeased);
(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 last maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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 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, expenses, costs and fees and expenses Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is neither Finance Co. nor not a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xixxx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xixxx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xixxx) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (32) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;Bank Indebtedness.
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (ax) the Company or any of its the Restricted Subsidiaries, Subsidiaries Incurred to finance an acquisition or (by) Persons that are acquired by the Company or any of its 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 pro forma effect to such acquisition 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 (x) greater than immediately prior to such acquisition, merger or amalgamation and (y) equal to or greater than 1.75 to 1.00;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution IndebtednessIndebtedness 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 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), as determined in accordance with clauses (B) and (C) of 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 4.04(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof);
(xx) Indebtedness of Foreign Subsidiaries Subsidiaries; provided, however, that the aggregate principal amount of Indebtedness Incurred for working capital purposes;
under this clause (xxi) xx), when aggregated with the principal amount of all other 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; and
(xxii) Indebtedness issued by the Company or a Restricted Subsidiary to current or former officers, directors then outstanding 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 the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(athis clause (xx), the Company shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Facidoes not exceed th
Appears in 1 contract
Sources: Indenture (MPM Silicones, LLC)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company Borrower shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer the Borrower and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company Borrower 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a6.01(a) shall not apply to:
(i) the Incurrence by the Company Borrower or its Restricted Subsidiaries of Indebtedness under the First Lien 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) up to an aggregate principal amount of $775 million outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00time;
(ii) the Incurrence by the Company Borrower and the Guarantors of Indebtedness represented by the Securities Senior Subordinated Notes, the Senior Subordinated Guarantees, the Original Loans (not including any Additional SecuritiesLoans) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofFloating Rate Guarantees, as applicable (including the exchange securities issued in exchange for the Senior Subordinated Notes and the related guarantees thereof);
(aiii) Indebtedness existing on the Existing First-Lien Issue Closing Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b6.01(b)) and (b) [reserved]);
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company Borrower 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, construction lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock Indebtedness then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.04.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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 without limitation letters of credit in respect of workers’ compensation claims, health, disability or other employee 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, however, that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing;
(vi) Indebtedness arising from agreements of the Company Borrower or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions Acquisition or any other acquisition or disposition of any business, assets or a Subsidiary of the Company Borrower in accordance with the terms of this IndentureAgreement, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Borrower to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor is subordinated in right of payment to the obligations of the Company Borrower under the SecuritiesLoans; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company 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 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 Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company Borrower or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Floating Rate Guarantee 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 lending such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are not Incurred incurred for speculative purposes andpurposes: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture Agreement to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales;
(xi) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal bid and surety bonds and completion guarantees provided by the Company Borrower or any Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company Borrower or any Restricted Subsidiary of the Company and Preferred Stock of any Restricted Subsidiary of the Company Borrower not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 100 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a6.01(a) from and after the first date on which the CompanyBorrower, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a6.01(a) without reliance upon this clause (xii));
(xiii) any guarantee (or co-issuance in by the case of Finance Co.) by an Issuer Borrower or a Guarantor of Indebtedness or other obligations of the Company Borrower or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by such Issuer the Borrower or such Restricted Subsidiary is permitted under the terms of this IndentureAgreement; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Securities Loans or the Note Floating Rate Guarantee 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 Floating Rate Guarantee with respect to the Securities, as applicable, Loans substantially to the same extent as such Indebtedness is subordinated to the Securities Loans or the Note Floating Rate Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company Borrower or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company Borrower which serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(a6.01(a) and clauses (ii), (iii)(aiii), (iv), (xiv), (xv), (xix) and/or and (xx) of this Section 4.03(b6.01(b) or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(1A) 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 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 Loans then outstanding were instead due on such date one year following the last date of maturity of the SecuritiesLoans;
(2B) 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 one year following the maturity date of the SecuritiesMaturity Date;
(3C) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities Loans or the Note Floating Rate Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities Loans or the Note Floating Rate Guarantee of such Restricted Subsidiary, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;
(4D) 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;
(5E) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company Borrower that is neither Finance Co. nor not a Guarantor that refinances Indebtedness of an Issuer the Borrower or a Restricted Subsidiary that is a Guarantor, or (y) Indebtedness of the Company Borrower or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(6F) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (iv), (xix) or (xixxx) of this Section 4.03(b6.01(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv), (xix) or (xixxx) of this Section 4.03(b6.01(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or ), (xix) and (xx) of this Section 4.03(b6.01(b); provided, further, that subclauses (A) subclauses (1), (2) and (3B) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;Bank Indebtedness.
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company Borrower or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this IndentureAgreement; 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 pro forma effect to such acquisition and the Incurrence of such Indebtedness either:
(1A) the Company Borrower 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(a6.01(a); or
(2B) the Fixed Charge Coverage Ratio would be greater than immediately prior to such acquisition;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company Borrower 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 Incurrence;
(xviii) Indebtedness of the Company Borrower or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the First Lien Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign 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 Borrower 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.
(xxiic) 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). For purposes of determining compliance with this Section 4.036.01, in the event that an item, or a portion of such item, taken by itself, 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 (xxiixxi) above or such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a6.01(a), the Company Borrower shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.036.01; provided that all Indebtedness under the FirstFirst Lien 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 Borrower shall not be permitted to reclassify all or any portion of such Indebtedness under the First Lien Credit Agreement outstanding on the Closing 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 6.01. 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 6.01.
(d) For purposes of determining compliance with any U.S. dollar-Lien Revolving Facidenominated 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 c
Appears in 1 contract
Sources: Second Lien Credit Agreement (Covalence Specialty Adhesives LLC)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i1) The Company shall Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; , and (ii2) the Company shall Issuer will not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding Issuer and its Restricted Subsidiaries, calculated as of 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 determined or greater (“Ratio Debt”); 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) $250 million and (y) 5.25% of Total Assets, at any one time outstanding, 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 foregoing limitations set forth in Section 4.03(a) shall will not apply to:to (collectively, “Permitted Debt”):
(i) the Incurrence by the Company Issuer or its Restricted Subsidiaries of Indebtedness under any Credit Agreement, the Credit Agreement 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 outstanding principal amount outstanding not to exceed the sum of (1) (x) $1,075 million plus (y) an unlimited amount so long as the Consolidated Senior Secured Debt Ratio does not exceed 3.00 to 1.00 (with any Indebtedness Incurred under subclause (x) hereof on the date of determination of the Consolidated Senior Secured Debt Ratio not being included in the calculation of the Consolidated Senior Secured Debt Ratio under this subclause (y) on such date but not, for the avoidance of doubt, excluded from any such calculation made on any such subsequent date), plus (2) up to an aggregate amount not to exceed at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) outstanding, the greater of (x) $50.0 550 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence Borrowing Base as of the date of such Indebtedness Incurrence, less, in each case of this clause (and application of the net proceeds therefrom2), the aggregate amount under Receivables Financings incurred by a Receivables Subsidiary; provided that solely for the purpose of calculating the Consolidated First-Lien Senior Secured Debt Ratio would under this clause (i), any outstanding Indebtedness Incurred under this clause (i) that is unsecured or secured on a junior basis shall nevertheless be no greater than 2.375 deemed to 1.00be secured by a Lien;
(ii) the Incurrence by the Company Issuer and the Guarantors of Indebtedness represented by (x) the Securities Notes (not including any Additional SecuritiesNotes) and the Existing First-Lien Guarantees thereof, as applicable, and (y) the 2024 Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien notes issued under the 2024 Notes issued after the Existing First-Lien Issue DateIndenture) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof);applicable
(aiii) Indebtedness of the Issuer and its Restricted Subsidiaries existing on the Existing First-Lien Issue Closing Date (after giving effect to the Transactions) (other than Indebtedness described in clauses clause (i) and or (ii) of this Section 4.03(babove)) and (b) [reserved];
(aiv) Indebtedness (including including, without limitation, Capitalized Lease ObligationsObligations and mortgage financings as purchase money obligations) Incurred by the Company Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any of its Restricted Subsidiaries of the Company to finance (whether prior to all or within 270 days after) any part of the purchase, lease, construction construction, installation, repair or improvement of property (real or personal) ), plant or equipment or other fixed or capital assets (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; Indebtedness arising from the conversion of the obligations of the Issuer or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of the Issuer or such Restricted Subsidiary, in an aggregate principal amount whichor liquidation preference, when aggregated with the principal amount of including all other Indebtedness, Indebtedness Incurred and Disqualified Stock and or Preferred Stock then outstanding that was issued to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), does not to exceed the greater of (x) $75.0 175 million and 5.0(y) 3.75% of Total Assets Assets, at any one time outstanding, plus, in the time case of Incurrenceany refinancing of any Indebtedness permitted under this clause (iv) or any portion thereof, the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums and other costs and expenses incurred in connection with such refinancing (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock Incurred pursuant to this clause (iv) shall cease to be deemed Incurred or outstanding pursuant to this clause (iv) but shall be deemed Incurred and outstanding as Ratio Debt from and after the first date on which the Issuer or such Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness, Disqualified Stock or Preferred Stock as Ratio Debt (to the extent the Issuer or any of its Restricted Subsidiaries are able to Incur any Liens related thereto as Permitted Liens after such reclassification)); provided that Capitalized Lease Obligations incurred by the Issuer or any Restricted Subsidiary pursuant to this clause (iv) in connection with a Sale/Leaseback Transaction shall not be subject to the foregoing limitation so long as the proceeds of such Sale/Leaseback Transaction are used by the Issuer or such Restricted Subsidiary to permanently repay outstanding loans under any Credit Agreement or other Indebtedness secured by a Lien on the assets subject to such Sale/Leaseback Transaction;
(v) Indebtedness Incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and or bank guarantees or similar instruments issued in the ordinary course of business, including including, without limitation limitation, (x) letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits to employees (whether current or former employees or their families former) 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 reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and (y) guarantees of Indebtedness Incurred by customers in connection with the purchase or other acquisition of equipment or supplies in the ordinary course of business;
(vi) Indebtedness arising from agreements of the Company Issuer or a its Restricted Subsidiary Subsidiaries providing for indemnification, earn-outs, adjustment of purchase or acquisition price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any (x) such Indebtedness owed owing to a Restricted Non-Guarantor Subsidiary that is neither Finance Co. nor a Guarantor is shall be subordinated in right of payment to the obligations of Issuer’s Obligations with respect to the Company under the Securities; provided, further, that Notes and (y) any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such IndebtednessIndebtedness not permitted by this clause (vii);
(viii) 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 Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred StockStock not permitted by this clause (viii);
(ix) Indebtedness of a Restricted Subsidiary owing to the Company Issuer or another Restricted Subsidiary; provided that (x) if Finance Co. or a Guarantor Incurs such Indebtedness owing to a Restricted Subsidiary that is neither Finance Co. nor a Non-Guarantor Subsidiary, such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee of such Guarantor, as applicable; provided, further, that and (y) any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary holding lending such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such IndebtednessIndebtedness not permitted by this clause (ix);
(x) Hedging Obligations that are Swap Contracts or Cash Management Services Incurred not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or salespurposes;
(xi) obligations (including reimbursement obligations with respect to letters of credit and or bank guaranteesguarantees or similar instruments) in respect of self-insurance, performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company Issuer or any Restricted Subsidiary in the ordinary course of businessSubsidiary;
(xii) Indebtedness or Disqualified Stock of the Company Issuer or any Restricted Subsidiary of the Company and Preferred Stock of any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference that, 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 (x) $100.0 275 million and (y) 5.75% of Total Assets, at any one time outstanding outstanding, plus, in the case of any refinancing of any Indebtedness permitted under this clause (xii) or any portion thereof, the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums and other costs and expenses incurred in connection with such refinancing (it being understood that any Indebtedness Indebtedness, Disqualified Stock or Preferred Stock Incurred under pursuant to this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of pursuant to this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a) and outstanding as Ratio Debt from and after the first date on which the Company, Issuer or the such Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause Indebtedness, Disqualified Stock or Preferred Stock as Ratio Debt (xiito the extent the Issuer or any of its Restricted Subsidiaries are able to Incur any Liens related thereto as Permitted Liens after such reclassification));
(xiii) any guarantee (or co-issuance in by the case of Finance Co.) by an Issuer or a Guarantor Restricted Subsidiary of Indebtedness or other obligations of the Company Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred or other obligations by such 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 Securities or the Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of the Issuer or a Restricted Subsidiary of the Company which that serves to refund, refinance refinance, replace, redeem, repurchase, retire or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(a) defease, and clauses (ii), (iii)(a), (iv), (xiv), (xv), (xix) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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, discount an aggregate issue price) that is equal to or less than the aggregate amount (or if issued with original issue discountthan, 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of issued as Ratio Debt or permitted under clause (aii), (iii), this clause (xiv), (xv) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition 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;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company this Section 3.3 or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) Indebtedness of the Company or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or subclause (y) take-or-pay obligations contained in supply arrangements, in of 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(aiv), the Company shall(xii), in its sole discretion(xx), divide, classify (xxix) or reclassify, or later divide, classify or reclassify, such item (xxx) of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Facithis
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company So long as the Bonds are outstanding, the Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. Stock or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if (i) the Fixed Charge Consolidated Leverage Ratio of the Issuer would have been less than or equal to 4.0 to 1.0, and (ii) the Interest Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued Issuer would have been at least 2.00 2.0 to 1.00 1.0, in each case determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock 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 period for which calculation of the Consolidated Leverage Ratio and the Interest Coverage Ratio is being performed.
(b) The limitations set forth in Section 4.03(aCondition 9.4(a) shall not apply to:
(i) the Incurrence by the Company Issuer or its Restricted Subsidiaries of Indebtedness under the a 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) up to an in the aggregate principal amount outstanding at any one time not to exceed:
exceed US$50,000,000 (1) an amount equal to or the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefromDollar Equivalent thereof), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00;
(ii) the Incurrence by the Company Issuer, the Guarantors and the Guarantors Pledgors of Indebtedness represented by the Securities (not including any Additional Securities) Bonds, the Guarantees and the Existing First-Lien Notes issued on Liens securing the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) Bonds and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof)Guarantees;
(aiii) Indebtedness existing and in force on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(bCondition 9.4(b)) and (b) [reserved]);
(aiv) Indebtedness (including Capitalized Capitalised Lease Obligations) Incurred by the Company Issuer or any of its Restricted SubsidiariesSubsidiary, and Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company Subsidiary, to finance (whether prior to or within 270 days after) the purchaseacquisition, lease, construction construction, repair, replacement or improvement of or to borrow against property (real or personal) or equipment (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 amount whichthat, when aggregated with the principal amount of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv)) following the Issue Date, does not exceed US$60,000,000 (or the greater of $75.0 million and 5.0% of Total Assets at the time of IncurrenceDollar Equivalent thereof);
(v) Indebtedness 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 including, but not limited, 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 authoritiesGovernmental Authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims;; 76 Alvotech - Bond Instrument (Tranche B)
(vi) Indebtedness arising from agreements of the Company Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, any assets or a Subsidiary of the Company Issuer in accordance with the terms of this IndentureInstrument, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such IndebtednessGuarantor;
(viii) shares of Preferred Stock of a Restricted Subsidiary Guarantor 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 Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred StockGuarantor;
(ix) Indebtedness of a Restricted Subsidiary Guarantor to the Company Issuer or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 of the Issuer or any Restricted Subsidiary that are not Incurred incurred for speculative purposes andbut: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture Instrument to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(xii) Indebtedness or Disqualified Stock of the Company Issuer or any Restricted Subsidiary of the Company and Preferred Stock of any Restricted Subsidiary of the Company not otherwise permitted hereunder under this Instrument in an aggregate principal amountamount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million the greater of US$10,000,000 (or the Dollar Equivalent thereof) and 2.5 per cent. of Total Assets at any one time outstanding (it being understood that any Indebtedness Incurred under 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(aCondition 9.4(a) from and after the first date on which the CompanyIssuer, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(aCondition 9.4(a) without reliance upon this clause (xii));
(xiii) any guarantee (or co-issuance in by the case of Finance Co.) by an Issuer or a Guarantor of Indebtedness or other obligations of the Company Issuer or any of its Restricted Subsidiaries Subsidiary so long as the Incurrence of such Indebtedness Incurred by such the Issuer or such Restricted Subsidiary is permitted under the terms of this IndentureInstrument; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Securities Bonds or the Note Guarantee of such Restricted Subsidiary, as applicable, any such guarantee (or co-issuance in the case of Finance Co.) of such Issuer or such Guarantor Restricted Subsidiary with respect to such Indebtedness shall be subordinated in right of payment to the Securities or such GuarantorRestricted Subsidiary’s Note Guarantee with respect to the Securities, as applicable, Bonds substantially to the same extent as such Indebtedness is subordinated to the Securities Bonds or the Note Guarantee of such Restricted Subsidiary, as applicable;; 77 Alvotech - Bond Instrument (Tranche B)
(xiv) the Incurrence by the Company Issuer or any of its Restricted Subsidiaries Subsidiary of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company which that serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(aCondition 9.4(a) and clauses (ii), (iii)(aiii), (iv), (xii) (xiv), (xv), (xix) and/or and (xxxxi) of this Section 4.03(bCondition 9.4(b) or any Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock, including any Indebtedness, additional Indebtedness or Disqualified Stock or Preferred Stock Incurred to pay premiums (including tender premiums), fees, expenses and fees in connection therewith defeasance costs (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity); provided, however, provided that such Refinancing Indebtedness:
(1A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which that is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness, Indebtedness or Disqualified Stock being refunded, refinanced or Preferred Stock being refunded or refinanced defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness, Indebtedness and Disqualified Stock and Preferred Stock being refunded or refinanced that were due on or after the date that is one year following the last maturity date of any Securities Bonds then outstanding were instead due on such date one year following the last date of maturity of the Securitiesdate;
(2B) has a Stated Maturity which that 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 Stated Maturity of the SecuritiesBonds;
(3C) to the extent such Refinancing Indebtedness refunds, refinances or defeases (a) Indebtedness junior to the Securities Bonds or the Note Guarantee of such Restricted Subsidiarya Guarantee, as applicable, such Refinancing Indebtedness is junior to the Securities Bonds or the Note Guarantee of such Restricted Subsidiarya Guarantee, as applicable, or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock;
(4D) 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 refunded, refinanced or defeased plus premium (including tender premium), fees fees, expenses and expenses defeasance costs Incurred in connection with such refinancing;
(5E) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer or a Restricted Subsidiary that is a Guarantorrefunds, refinances or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances defeases Indebtedness of an Unrestricted Subsidiary; and
(6F) in the case of any Refinancing Indebtedness Incurred to refund, refinance or defease Indebtedness outstanding under clause (iv), (xii), (xix) or (xixxxi) of this Section 4.03(bCondition 9.4(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv), (xii), (xix) or (xixxxi) of this Section 4.03(bCondition 9.4(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses clause (iv), (xii), (xix) or (xixxxi) of this Section 4.03(bCondition 9.4(b); provided, further, that subclauses (A) subclauses (1), (2) and (3B) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereofBank Indebtedness;
(xv) Indebtedness, Indebtedness or Disqualified Stock or Preferred Stock of (ax) the Company Issuer or any of its Restricted Subsidiaries, Subsidiary Incurred to finance an acquisition of any property or assets or (by) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiaries Subsidiary or merged merged, consolidated or amalgamated with or into the Company Issuer or a Restricted Subsidiary in accordance with the terms of this IndentureInstrument; providedprovided that, howeverin each case, that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger, consolidation or amalgamation either:
(1A) the Company Issuer would be permitted to Incur at least $US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Consolidated Leverage Ratio test set forth in the first sentence of Section 4.03(aCondition 9.4(a); or
(2B) the Fixed Charge Coverage Consolidated Leverage Ratio would be greater less than immediately prior to such acquisitionacquisition or merger, consolidation or amalgamation;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company Issuer or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Securitisation Undertakings); provided that the aggregate principal amount of Indebtedness permitted by this clause (xvi) at any time outstanding does not exceed US$25,000,000 (or the Dollar Equivalent thereof);
(xvii) Indebtedness arising from the honoring honouring 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 Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the a Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit, to the extent such letter of credit or bank guarantee issued pursuant to such Credit Agreement is otherwise permitted by this Condition 9.4;
(xix) Contribution IndebtednessIndebtedness in an aggregate principal amount at any time not to exceed US$250,000,000;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) Indebtedness of the Company 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;
(xxiixxi) Indebtedness issued by of the Company Issuer or a any Restricted Subsidiary to current Incurred in connection with an Investment in, or former officersrepresenting guarantees of Indebtedness of, directors and employees thereof joint ventures of the Issuer or any direct Restricted Subsidiary in an aggregate principal amount, at any one time outstanding, not to exceed (A) US$25,000,000 (or indirect parent the Dollar Equivalent thereof) in the case of Indebtedness Incurred in connection with an Investment in, or their respective estatesrepresenting guarantees of Indebtedness of, spouses any Restricted Subsidiary, or former spouses(B) US$5,000,000 in the case of Indebtedness Incurred in connection with an Investment in, or representing guarantees of Indebtedness of, any joint venture, in each case to finance the purchase or redemption of Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 (xxii) above or such item is (or portion, taken by itself, would be) 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 or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving FaciIncurrence;
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i1) The Company shall Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; , and (ii2) the Company shall Issuer will not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding Issuer and its Restricted Subsidiaries, calculated as of 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 determined or greater (“Ratio Debt”); 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) $500 million and (y) 5.25% of Total Assets, at any one time outstanding, 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 foregoing limitations set forth in Section 4.03(a) shall will not apply to:to (collectively, “Permitted Debt”):
(i) the Incurrence by the Company Issuer or its Restricted Subsidiaries of Indebtedness under any Credit Agreement, the Credit Agreement 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 outstanding principal amount outstanding not to exceed the sum of (1) (x) $2,325 million plus (y) an unlimited amount so long as the Consolidated Senior Secured Debt Ratio does not exceed 3.00 to 1.00 (with any Indebtedness Incurred under subclause (x) hereof on the date of determination of the Consolidated Senior Secured Debt Ratio not being included in the calculation of the Consolidated Senior Secured Debt Ratio under this subclause (y) on such date but not, for the avoidance of doubt, excluded from any such calculation made on any such subsequent date), plus (2) up to an aggregate amount not to exceed at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) outstanding, the greater of (x) $50.0 700 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence Borrowing Base as of the date of such Indebtedness Incurrence, less, in each case of this clause (and application of the net proceeds therefrom2), the aggregate amount under Receivables Financings incurred by a Receivables Subsidiary; provided that solely for the purpose of calculating the Consolidated First-Lien Senior Secured Debt Ratio would under this clause (i), any outstanding Indebtedness Incurred under this clause (i) that is unsecured or secured on a junior basis (in whole or in part) shall nevertheless be no greater than 2.375 deemed to 1.00be secured by a Lien;
(ii) the Incurrence by the Company and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereof, as applicable (including the exchange securities and related guarantees thereof);
(a) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved];
(aiii) Indebtedness of the Issuer and its Restricted Subsidiaries existing on the Issue Date (other than Indebtedness described in clause (i) above), including the Unsecured Notes;
(iv) Indebtedness (including including, without limitation, Capitalized Lease ObligationsObligations and mortgage financings as purchase money obligations) Incurred by the Company Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any of its Restricted Subsidiaries of the Company to finance (whether prior to all or within 270 days after) any part of the purchase, lease, construction construction, installation, repair or improvement of property (real or personal) ), plant or equipment or other fixed or capital assets (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; Indebtedness arising from the conversion of the obligations of the Issuer or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of the Issuer or such Restricted Subsidiary, in an aggregate principal amount whichor liquidation preference, when aggregated with the principal amount of including all other Indebtedness, Indebtedness Incurred and Disqualified Stock and or Preferred Stock then outstanding that was issued to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), does not to exceed the greater of (x) $75.0 350 million and 5.0(y) 3.75% of Total Assets Assets, at any one time outstanding, plus, in the time case of Incurrenceany refinancing of any Indebtedness permitted under this clause (iv) or any portion thereof, the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums and other costs and expenses incurred in connection with such refinancing (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock Incurred pursuant to this clause (iv) shall cease to be deemed Incurred or outstanding pursuant to this clause (iv) but shall be deemed Incurred and outstanding as Ratio Debt from and after the first date on which the Issuer or such Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness, Disqualified Stock or Preferred Stock as Ratio Debt (to the extent the Issuer or any of its Restricted Subsidiaries are able to Incur any Liens related thereto as Permitted Liens after such reclassification)); provided that Capitalized Lease Obligations incurred by the Issuer or any Restricted Subsidiary pursuant to this clause (iv) in connection with a Sale/Leaseback Transaction shall not be subject to the foregoing limitation so long as the proceeds of such Sale/Leaseback Transaction are used by the Issuer or such Restricted Subsidiary to permanently repay outstanding loans under any Credit Agreement or other Indebtedness secured by a Lien on the assets subject to such Sale/Leaseback Transaction;
(v) Indebtedness Incurred by the Company Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit and or bank guarantees or similar instruments issued in the ordinary course of business, including including, without limitation limitation, (x) letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits to employees (whether current or former employees or their families former) 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 reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and (y) guarantees of Indebtedness Incurred by customers in connection with the purchase or other acquisition of equipment or supplies in the ordinary course of business;
(vi) Indebtedness arising from agreements of the Company Issuer or a its Restricted Subsidiary Subsidiaries providing for indemnification, earn-outs, adjustment of purchase or acquisition price or similar obligations, in each case, Incurred in connection with the Transactions or any the acquisition or disposition of any business, assets or a Subsidiary of the Company Issuer in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any (x) such Indebtedness owed owing to a Restricted Non-Guarantor Subsidiary that is neither Finance Co. nor a Guarantor is shall be subordinated in right of payment to the obligations of Issuer’s Obligations with respect to the Company under the Securities; provided, further, that Notes and (y) 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 a Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such IndebtednessIndebtedness not permitted by this clause (vii);
(viii) 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 Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred StockStock not permitted by this clause (viii);
(ix) Indebtedness of a Restricted Subsidiary owing to the Company Issuer or another Restricted Subsidiary; provided that (x) if Finance Co. or a Subsidiary Guarantor Incurs such Indebtedness owing to a Restricted Subsidiary that is neither Finance Co. nor a Non-Guarantor Subsidiary, such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee of such Subsidiary Guarantor, as applicable; provided, further, that and (y) any subsequent issuance or transfer of any Capital Stock or any other event which that results in any Restricted Subsidiary holding lending such Indebtedness 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 Incurrence of such IndebtednessIndebtedness not permitted by this clause (ix);
(x) Hedging Obligations that are Swap Contracts or Cash Management Services Incurred not Incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or salespurposes;
(xi) obligations (including reimbursement obligations with respect to letters of credit and or bank guaranteesguarantees or similar instruments) in respect of self-insurance, performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Company Issuer or any Restricted Subsidiary in the ordinary course of businessSubsidiary;
(xii) Indebtedness or Disqualified Stock of the Company Issuer or any Restricted Subsidiary of the Company and Preferred Stock of any Restricted Subsidiary of the Company not otherwise permitted hereunder in an aggregate principal amountamount or liquidation preference that, 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 (x) $100.0 550 million and (y) 5.75% of Total Assets, at any one time outstanding outstanding, plus, in the case of any refinancing of any Indebtedness permitted under this clause (xii) or any portion thereof, the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums and other costs and expenses incurred in connection with such refinancing (it being understood that any Indebtedness Indebtedness, Disqualified Stock or Preferred Stock Incurred under pursuant to this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of pursuant to this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a) and outstanding as Ratio Debt from and after the first date on which the Company, Issuer or the such Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause Indebtedness, Disqualified Stock or Preferred Stock as Ratio Debt (xiito the extent the Issuer or any of its Restricted Subsidiaries are able to Incur any Liens related thereto as Permitted Liens after such reclassification));
(xiii) any guarantee (or co-issuance in by the case of Finance Co.) by an Issuer or a Guarantor Restricted Subsidiary of Indebtedness or other obligations of the Company Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred or other obligations by such 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 Securities or the Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of the Issuer or a Restricted Subsidiary of the Company which that serves to refund, refinance refinance, replace, redeem, repurchase, retire or defease defease, and is in an aggregate principal amount (or if issued with original issue discount an aggregate issue price) that is equal to or less than, Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as Ratio Debt or permitted under clause (ii), (iii), this clause (xiv), (xv) or (xviii) of this Section 3.3(b) or subclause (y) of each of clauses (iv), (xii), (xx), (xxix) or (xxx) of this Section 3.3(b) (provided that any amounts incurred under this clause (xiv) as Refinancing Indebtedness of subclause (y) of these clauses shall reduce the amount available under such subclause (y) of such clauses) so long as such Refinancing Indebtedness remains outstanding or any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(a) and clauses (ii), (iii)(a), (iv), (xiv), (xv), (xix) and/or (xx) of this Section 4.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund refund, replace, refinance, redeem, repurchase, retire or refinance defease such Indebtedness, Disqualified Stock or Preferred Stock, including plus any Indebtedness, additional Indebtedness Incurred or Disqualified Stock or Preferred Stock Incurred issued to pay unpaid accrued interest and the aggregate amount of premiums (including reasonable tender premiums), and underwriting discounts, defeasance costs and fees and expenses in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which that 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 refunded, refinanced, replaced, redeemed, repurchased or 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 Securitiesretired;
(2) in the case of any revolving Indebtedness, has a Stated Maturity which is not no earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded refunded, refinanced, replaced, redeemed, repurchased or refinanced or (y) 91 days following the maturity date of the Securitiesretired;
(3) to the extent that such Refinancing Indebtedness refinances (ai) Indebtedness junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicableSubordinated Indebtedness, such Refinancing Indebtedness is junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, Subordinated Indebtedness or (bii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock, respectively;
(4) 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 neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer 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 Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereof;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of a Non-Guarantor Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Subsidiary Guarantor, or (ay) Indebtedness or Disqualified Stock of the Company Issuer or Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; and
(5) to the extent such Refinancing Indebtedness is secured, the Liens securing such Refinancing Indebtedness have a Lien priority equal to or junior to the Liens securing the Indebtedness being refunded, refinanced, replaced, redeemed, repurchased or retired;
(i) Indebtedness, Disqualified Stock or Preferred Stock (x) of the Issuer or any of its Restricted Subsidiaries, Subsidiaries Incurred to finance or assumed in connection with an acquisition of any assets (including Capital Stock), business or Person and (by) Persons of any Person that are is acquired by the Company Issuer or any of its Restricted Subsidiaries or merged into or consolidated or amalgamated into with the Company Issuer or a Restricted Subsidiary in accordance with the terms of this IndentureIndenture and (ii) Indebtedness Incurred or assumed in anticipation of an acquisition of any assets, business or Person; provided, however, that after giving pro forma effect to such acquisition acquisition, merger, consolidation or amalgamation and the Incurrence of such Indebtedness Indebtedness, Disqualified Stock or Preferred Stock, either:
(1) the Company Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage as Ratio test set forth in the first sentence of Section 4.03(a)Debt; or
(2) the Fixed Charge Coverage Ratio would be of the Issuer is equal to or greater than immediately prior to such acquisition, merger, consolidation 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 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;
(xviiixvii) Indebtedness of the Company Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreementany credit facility permitted hereunder, so long as such letter of credit has not been terminated and is in a principal amount not in excess of the stated amount of such letter of creditcredit or bank guarantee;
(xixxviii) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxixix) Indebtedness of the Company 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;
(xxiixx) 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv). 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 of Non-Guarantor Subsidiaries in an aggregate principal amount not to exceed the criteria greater of more than (x) $500 million and (y) 5.25% of Total Assets, at any one of the categories of permitted time outstanding (it being understood that any 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 4.03(a), the Company shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies this clause (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Facixx
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, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any Issuer and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a4B.03(a) shall not apply to:
(i) the Incurrence by the Company or its Restricted Subsidiaries of Indebtedness under the any 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) up to an aggregate principal amount outstanding at any one time not to exceed:
: (1i) an amount equal to the greater of (1) $200.0 325.0 million and (2) the Borrowing Base; plus
plus (2ii) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence Incurrence of such Indebtedness (and the application of the net proceeds therefrom), the Consolidated First-Lien Secured Senior Debt Ratio would be no greater than 2.375 3.75 to 1.00;
(ii) the Incurrence by the Company Issuers and the Guarantors of Indebtedness represented by (x) the Securities (not Original Securities, and for the avoidance of doubt, including any Additional Securities) PIK Securities issued from time to time and any guarantees thereof), and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofGuarantees, as applicable (including Exchange Securities and related guarantees thereof) and (y) the New Fixed Rate Second Lien Notes and the guarantees thereof (and any exchange securities notes and related guarantees thereof);
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b4B.03(b)) and (b) [reserved]);
(iv) (a) Indebtedness (including Capitalized Lease Obligations) 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, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) 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 neither Finance Co. nor a Guarantor Guarantor, such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee 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 that are not Incurred incurred for speculative purposes and: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be 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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company or any Restricted Subsidiary of the Company and Preferred Stock of 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, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed $100.0 million at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a4B.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(a4B.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 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 Note Guarantee 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 Guarantee with respect to the Securities, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note 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 of a Restricted Subsidiary of the Company which serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.03(a4B.03(a) and clauses (ii), (iii)(aiii), (iv), (xiv), (xv), (xixxix),(xx) and/or (xxxxiii) of this Section 4.03(b4B.03(b) or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(1A) 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 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;
(2B) 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;
(3C) to the extent such Refinancing Indebtedness refinances (a) Indebtedness equal to or junior to the Securities or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior equal to or junior, as applicable, to the Securities 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;
(4D) 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;
(5E) shall not include (x) Indebtedness of a Restricted Subsidiary of the Company that is neither Finance Co. nor a Guarantor that refinances Indebtedness of an Issuer the Company or a Restricted Subsidiary that is an Issuer or a Guarantor, or (y) Indebtedness of the Company or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(6F) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (iv) or (xix) of this Section 4.03(b4B.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xix) of this Section 4.03(b4B.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) or (xix) of this Section 4.03(b4B.03(b); provided, further, that (A) subclauses (1), (2) and (32) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereofIndebtedness;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (ax) the Company or any of its Restricted Subsidiaries, Subsidiaries Incurred to finance an acquisition or (by) Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged or amalgamated into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness either:
(1A) 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(a4B.03(a); or
(2B) the Fixed Charge Coverage Ratio would be greater than immediately prior to such acquisition;
(xvi) 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 Incurrence;
(xviii) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries Incurred for working capital purposes;
(xxi) 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; 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 Equity Interests of the Company or any of its direct or indirect parent companies to the extent permitted under Section 4.04(b)(iv4B.04(b)(iv);
(xxiii) Indebtedness in respect of the New Senior Secured Notes in an aggregate amount not to exceed $650.0 million;
(xxiv) Indebtedness in respect of the NewPage Term Loan Facility in an aggregate amount not to exceed $750.0 million; and
(xxv) the Incurrence by the NewPage Entities of Indebtedness under the NewPage 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) up to an aggregate principal amount outstanding at any one time not to exceed the greater of (i) $550.0 million and (ii) the NewPage Borrowing Base. For purposes of determining compliance with this Section 4.034B.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 (xxiixxv) above or such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a4B.03(a), the Company Issuers shall, in its their sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Faciclassi
Appears in 1 contract
Sources: Indenture (Verso Paper Corp.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company Issuer shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Subsidiary Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Subsidiary Guarantor or a Foreign Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company Issuer 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 or such Disqualified Stock or Preferred Stock is issued 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 period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) (x) the Incurrence by the Company Issuer or its Restricted Subsidiaries of Secured Indebtedness under the any Credit Agreement 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) up to in the aggregate principal amount of $3,200 million plus an aggregate additional principal amount outstanding at any one time that does not cause the Secured Indebtedness Leverage Ratio of the Issuer to exceed:
(1) an amount equal exceed 4.00 to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that1.00, determined on a pro forma basis after giving effect to the incurrence of such Indebtedness (and including a pro forma application of the net proceeds therefrom)) and (y) the Incurrence by the Issuer or its Restricted Subsidiaries of Secured Indebtedness under the Revolving Credit Agreement or any other Credit Agreement that is a revolving, working capital or liquidity facility in an aggregate amount not to exceed the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00of (A) $650 million and (B) the Borrowing Base as of the date of such Incurrence;
(ii) the Incurrence by the Company Issuer and the Subsidiary Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofSubsidiary Guarantees, as applicable (including the exchange securities and related guarantees thereof)applicable;
(aiii) Indebtedness existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)) and (b) [reserved]);
(aiv) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Company Issuer to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b) Acquired Indebtedness; in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Original Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Company Issuer occurring after September 20, 2006 and before the Issue Date, and any other acquisition or disposition of any business, assets or a Subsidiary of the Issuer occurring on or after the Issue Date in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor not a Subsidiary Guarantor is subordinated in right of payment to the obligations of the Company Issuer under the Securities; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) 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 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 Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that if Finance Co. or a Subsidiary Guarantor Incurs incurs such Indebtedness to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor Subsidiary Guarantor, such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Subsidiary Guarantee of such Subsidiary 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 Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are not Incurred incurred for speculative purposes andand either: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; and/or or (3) for the purpose of fixing or hedging commodity price risk (including resin price risk) with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary in the ordinary course of business;
(xii) Indebtedness or Disqualified Stock of the Company Issuer or any Restricted Subsidiary of the Company Issuer and Preferred Stock of any Restricted Subsidiary of the Company Issuer not otherwise permitted hereunder 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 (xii), does not exceed the greater of $100.0 250.0 million and 5.0% of Total Assets at any one the time outstanding 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 CompanyIssuer, 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 (or co-issuance in by the case of Finance Co.) by an Issuer or a Subsidiary Guarantor of Indebtedness or other obligations of the Company Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by such 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 Securities or the Note Subsidiary Guarantee of such Restricted Subsidiary, as applicable, any such guarantee (or co-issuance in the case of Finance Co.) of such Issuer or such Subsidiary Guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Securities or such Subsidiary Guarantor’s Note Subsidiary Guarantee with respect to the Securities, as applicable, Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Note Subsidiary Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company Issuer which 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 (i), (ii), (iii)(aiii), (iv), (xiv), (xv), (xix) and/or and (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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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 Securitiesrefinanced;
(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 (y) 91 days following the maturity date of the Securities;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities or the Note Subsidiary Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities or the Note Subsidiary 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 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 Issuer that is neither Finance Co. nor not a Subsidiary Guarantor that refinances Indebtedness of an the Issuer or a Restricted Subsidiary that is a Subsidiary Guarantor, or (y) Indebtedness of the Company Issuer 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 (i), (iv) or (xixxx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (i), (iv) or (xixxx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (i), (iv) or and (xixxx) of this Section 4.03(b); provided, further, that (A) subclauses (1), (2) and (32) of this clause (xiv) shall not apply to any refunding or refinancing of the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-First Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereofObligations;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (ax) the Company Issuer or any of its Restricted Subsidiaries, Incurred Subsidiaries incurred to finance an acquisition or (by) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiaries or merged with or amalgamated into the Company Issuer or a any of its Restricted Subsidiary Subsidiaries in accordance with the terms of this Indenture; provided, however, that after giving pro forma effect to such acquisition and the Incurrence of such Indebtedness or merger either:
(1) the Company Issuer would be permitted to Incur 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 of the Issuer would be greater than immediately prior to such acquisitionacquisition or merger;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Company Issuer 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 Incurrence;
(xviii) Indebtedness of the Company Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the any Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries; 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, at any one time outstanding, the greater of $100.0 million and 10.0% of the Total Assets held on the balance sheet of all Foreign Subsidiaries Incurred for working capital purposesof the Issuer, taken together, at the time of Incurrence;
(xxi) Indebtedness of the Company 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 issued by incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of the Company Issuer or a any Restricted Subsidiary to current or former officersnot in excess, directors and employees thereof or at any direct or indirect parent thereofone time outstanding, or their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Company or any greater of its direct or indirect parent companies to (i) $250 million and (ii) 5.0% of Total Assets at the extent permitted under Section 4.04(b)(iv)time of Incurrence. 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, 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 such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a), the Company Issuer shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness or any portion thereof in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03. 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 or amortization 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 all the Incurrence of the Indebtedness under represented by such guarantee or letter of credit, as the Firstcase may be, was in compliance with this Section 4.03. For purposes of determining compliance with any U.S. dollar-Lien Revolving Facidenominated restriction on the Incurrence of Indebtedness, the U.S. dollar-
Appears in 1 contract
Sources: Indenture (Berry Plastics Group Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) The Company the Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and (ii) the Company Issuer shall not permit any of its Restricted Subsidiaries (other than Finance Co. or a Guarantor) to issue any shares of Preferred Stock; provided, however, that any the Issuer and any Restricted Subsidiary that is a Guarantor or a of the Issuer (other than any Designated Foreign Subsidiary Subsidiary) may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary (other than any Designated Foreign Subsidiary) may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Company for the 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 or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 2.0 to 1.00 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock 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 limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by the Company Issuer or its Restricted Subsidiaries (other than any Designated Foreign Subsidiary) of Indebtedness under the any 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) up to an aggregate principal amount of $1,252.5 million outstanding at any one time not to exceed:
(1) an amount equal to the greater of (1) $200.0 million and (2) the Borrowing Base; plus
(2) the greater of (x) $50.0 million and (y) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated First-Lien Secured Debt Ratio would be no greater than 2.375 to 1.00time;
(ii) the Incurrence by the Company Issuer and the Guarantors of Indebtedness represented by the Securities (not including any Additional Securities) Notes and the Existing First-Lien Notes issued on the Existing First-Lien Issue Date (not including any additional Existing First-Lien Notes issued after the Existing First-Lien Issue Date) and the guarantees thereofGuarantees, as applicable (including the exchange securities and related guarantees thereof)applicable;
(aiii) Indebtedness of the Issuer and its Restricted Subsidiaries existing on the Existing First-Lien Issue Date (after giving effect to the Transactions) (other than Indebtedness described in clauses (iSection 4.03(b)(i) and (ii) of this Section 4.03(b4.03(b)(ii)) ), including, without limitation, the Indebtedness outstanding under the Senior Notes and (b) [reserved]the 11 1⁄2% Senior Subordinated Notes outstanding after giving effect to the Restructuring and related guarantees;
(a1) Indebtedness (including Capitalized Lease Obligations) Incurred by the Company Issuer or any of its Restricted SubsidiariesSubsidiaries (other than any Designated Foreign Subsidiary), Disqualified Stock issued by the Company Issuer or any of its Restricted Subsidiaries (other than any Designated Foreign Subsidiary) and Preferred Stock issued by any Restricted Subsidiaries of the Company Issuer (other than any Designated Foreign Subsidiary) to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets (but no other material assets)) and (b2) Acquired Indebtedness; in an provided, however, that the aggregate principal amount whichof Indebtedness, Disqualified Stock and Preferred Stock incurred pursuant to this clause (iv), when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding that was Incurred (or deemed Incurred as provided under clause (xiv) below) pursuant to this clause (iv), does not exceed the greater of $75.0 million and 5.0% of Total Assets at the time of Incurrence50 million;
(v) Indebtedness 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;
(vi) Indebtedness arising from agreements of the Company Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any acquisition or the disposition of any business, assets or a Subsidiary of the Company Issuer in accordance with the terms of this IndentureNote Agreement, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness of the Company Issuer to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is neither Finance Co. nor a Guarantor is subordinated in right of payment to the obligations of the Company Issuer under the SecuritiesNotes; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Company Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary (other than a Designated Foreign 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 Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company Issuer or another Restricted Subsidiary; provided that if Finance Co. or a Guarantor Incurs incurs such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that is neither Finance Co. nor not a Guarantor Guarantor, such Indebtedness is subordinated in right of payment to the Securities (in the case of Finance Co.) or the Note Guarantee of such Guarantor, as applicable; provided, further, 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 (x) to the Company Issuer or another Restricted SubsidiarySubsidiary or (y) a pledge of Indebtedness referred to in this clause (ix) shall be deemed to be held by the pledgor and shall not be deemed a transfer until the pledgee commences actions to foreclose on such Indebtedness) shall be deemed, in each case, to be an Incurrence of such Indebtedness;; provided further, that in the case of any such Indebtedness of a Designated Foreign Subsidiary, the net proceeds of which are used solely for working capital purposes of such Designated Foreign Subsidiary or for Investments or acquisitions made by a Designated Foreign Subsidiary
(x) Hedging Obligations that are Incurred not Incurred for speculative purposes and: and either (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture Note Agreement to be outstanding; outstanding or (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 price risk with respect to any commodity purchases or sales;
(xi) 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 Restricted Subsidiary Subsidiary, in each case, reasonably required in the ordinary course conduct of the business (giving effect to any growth or expansion of such business), including those to secure health, safety, insurance and environmental obligations of the Issuer and its Restricted Subsidiaries as conducted in accordance with good and prudent business industry practice;
(xii) Indebtedness or Disqualified Stock of the Company Issuer or any Restricted Subsidiary of the Company Issuer and Preferred Stock of any Restricted Subsidiary of the Company Issuer not otherwise permitted hereunder in an aggregate principal amountamount which, 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 $100.0 50 million at any one time outstanding (it being understood outstanding; provided that in the case of any such 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 a Designated Foreign Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii));net proceeds of which are used solely for Investments or acquisitions in or by a Designated Foreign Subsidiary
(xiii) any guarantee (or co-issuance in by the case of Finance Co.) by an Issuer or a Guarantor any of its Restricted Subsidiaries of Indebtedness or other obligations of the Company Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred or other Obligations by such the Issuer or such Restricted Subsidiary is permitted under the terms of this IndentureNote Agreement and, in the case of a guarantee by a Designated Foreign Subsidiary, the net proceeds of such Indebtedness Incurred are used solely for Investments or acquisitions in or by a Designated Foreign Subsidiary; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Securities Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, any such guarantee (or co-issuance in of the case of Finance Co.) of such Issuer or such Guarantor guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Securities Notes or such Guarantor’s Note Guarantee with respect to the SecuritiesGuarantee, as applicable, substantially to the same extent as such Indebtedness is subordinated to the Securities Notes or the Note Guarantee of such Restricted Subsidiary, as applicable;
(xiv) the Incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company Issuer which serves to refund, refinance or defease any Indebtedness Incurred or Indebtedness, Disqualified Stock or Preferred Stock issued Incurred as permitted under Section 4.03(a) the first paragraph of this covenant and clauses (ii), (iii)(aiii), (iv), (xiv), (xv), (xviii) and (xix) 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 any Indebtedness, Disqualified Stock or Preferred Stock Incurred to pay premiums and fees in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; 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 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 Securitiesrefinanced;
(2) has a Stated Maturity which is not no earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or (y) at least 91 days following later than the maturity date of the SecuritiesNotes;
(3) to the extent such Refinancing Indebtedness refinances (a) Indebtedness junior to the Securities Notes or the Note Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Securities 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, premium and fees and expenses Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Company Issuer that is neither Finance Co. nor not a Subsidiary Guarantor that refinances Indebtedness Indebtedness, Disqualified Stock or Preferred Stock of an the Issuer or a Restricted Subsidiary that is a Subsidiary Guarantor, or (y) Indebtedness of the Company Issuer or a Restricted Subsidiary that refinances Indebtedness Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; and
(6) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (ivSection 4.03(b)(iv) or (xix) of this Section 4.03(b4.03(b)(xix), shall be deemed to have been Incurred and to be outstanding under such clause (ivSection 4.03(b)(iv) or (xix) of this Section 4.03(b4.03(b)(xix), as applicable, and not this clause (xivSection 4.03(b)(xiv) for purposes of determining amounts outstanding under such clauses (ivSection 4.03(b)(iv) or (xix) of this Section 4.03(b4.03(b)(xix); , provided, further, that (A) subclauses (1), ) and (2) and (3) of this clause (xivSection 4.03(b)(xiv) shall not apply to any refunding refunding, refinancing or refinancing defeasance of (A) the Securities , the Second-Lien Notes or any Secured Indebtedness constituting First-Priority Lien Obligations and (B) subclause (3) of this clause (xiv) will not apply to any refunding or refinancing of the Senior Subordinated Notes, to the extent such refunding or refinancing occurs within one year of the Stated Maturity thereofSecured Indebtedness;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (a) the Company or any of its Restricted Subsidiaries, Incurred to finance an acquisition or (b) Persons that are acquired by the Company Issuer or any of its Restricted Subsidiaries or merged or amalgamated into the Company Issuer or a Restricted Subsidiary in accordance with the terms of this IndentureNote Agreement; 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 pro forma effect to such acquisition and the Incurrence of such Indebtedness eitheracquisition, merger or amalgamation:
(1) the Company Issuer 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 of the Issuer would be greater than or equal to such ratio immediately prior to such acquisition;
(xvi) 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 Incurrence;
(xviiixvii) Indebtedness of the Company Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of creditcredit or bank guarantee, provided that if (i) the Indebtedness represented by such letter of credit or bank guarantee is incurred under any of the clauses of this Section 4.03(b) and (ii) the Indebtedness incurred under this clause (xvii) is at any time no longer supported by such letter of credit or bank guarantee, then the Indebtedness previously incurred under this Section 4.03(b)(xvii) shall be classified under the preceding paragraph or under another available clause in this paragraph and if such Indebtedness may not be so reclassified, then an Event of Default under this Note Agreement shall be deemed to have occurred;
(xviii) Contribution Indebtedness; and
(xix) Contribution Indebtedness;
(xxif the Issuer could not Incur $1.00 of additional Indebtedness pursuant to Section 4.03(a) after giving effect to such borrowing, Indebtedness of Foreign Non-Guarantor Restricted Subsidiaries Incurred for working capital purposes;
purposes and any refinancings of such Indebtedness; provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (xxixix), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred (or deemed Incurred pursuant to Section 4.03(b)(xiv) Indebtedness of the Company or any Restricted Subsidiary consisting of (xabove) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangementspursuant to this Section 4.03(b)(xix), in each casedoes not exceed $25 million; provided, further, that in the ordinary course case of business; and
(xxii) any such Indebtedness issued Incurred by a Designated Foreign Subsidiary, the Company or a Restricted Subsidiary to current or former officersnet proceeds of which are used solely for working capital purposes of such Designated Foreign Subsidiary. Notwithstanding the foregoing, directors the Issuer will not, 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 the Company or will not permit any of its direct Restricted Subsidiaries to, directly or indirect parent companies indirectly, after the Issue Date issue any Indebtedness (including Acquired Indebtedness) to the extent permitted under Section 4.04(b)(iv). Sponsor; provided that the Sponsor may acquire Indebtedness in secondary transactions not involving the Issuer of any of its Restricted Subsidiaries.
(c) 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, item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of one or more than one of the categories of permitted Indebtedness Indebtedness, Disqualified Stock or Preferred Stock described in clauses (iSection 4.03(b)(i) through (xxiiSection 4.03(b)(xix) above or such item is (or portion, taken by itself, would be) entitled to be Incurred pursuant to Section 4.03(a), ) the Company Issuer shall, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness Indebtedness, Disqualified Stock or any portion thereof Preferred Stock in any manner that complies (based on circumstances existing at the time of such division, classification or reclassification) with this Section 4.03; provided that all Indebtedness under the First-Lien Revolving Facimanne
Appears in 1 contract