Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to create, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to: (a) Indebtedness arising under the Credit Documents; (b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000; (c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party); (d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a); (e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; (f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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; (g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause; (h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause; (i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause; (j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes); (k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice; (i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii)); (m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor; (n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the
Appears in 4 contracts
Sources: Credit Agreement (GoDaddy Inc.), Credit Agreement (GoDaddy Inc.), Credit Agreement (GoDaddy Inc.)
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issueassume or suffer to exist any Indebtedness, assume, guarantee except:
(a) Indebtedness arising under this Agreement or otherwise become liable, contingently or otherwise the Notes;
(collectively, “incur” and collectively, an “incurrence”b) with respect Indebtedness of the Company to any Indebtedness (including Acquired Indebtedness) Wholly Owned Subsidiary and Holdings will not issue of any shares of Disqualified Stock and will not permit any Restricted Wholly Owned Subsidiary to issue the Company or any shares other Wholly Owned Subsidiary;
(c) Indebtedness outstanding on the date hereof and listed on Schedule 7.2 and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(d) [Reserved];
(e) secured Broker-Dealer Indebtedness and Indebtedness of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stockLazard Frères Banque; provided that Holdingsafter giving effect to the incurrence of any unsecured Indebtedness by Lazard Frères Bank permitted under this Section 7.2(e), the Borrowers aggregate of its unencumbered assets shall exceed the aggregate of its unsecured Indebtedness;
(f) Indebtedness of a Subsidiary acquired after the Effective Date or a corporation or other entity merged into or consolidated with the Company or any Subsidiary after the Effective Date and their Restricted Subsidiaries may incur Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case, exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event and where such acquisition, merger or consolidation is permitted by this Agreement and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness; provided that, immediately after giving effect to the acquisition or assumption of such Indebtedness (including Acquired other than Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness), the Leverage Ratio shall not be greater than 3.5 to 1.0;
(g) Capital Lease Obligations in connection with the Paris Lease and any Indebtedness the net proceeds of which are used to refinance or issue shares replace such Capital Lease Obligations; provided that the principal amount of Disqualified Stocksuch Indebtedness does not exceed the value of the real property covered by the Paris Lease;
(h) additional Capital Lease Obligations in an aggregate principal amount not to exceed $10,000,000 at any one time outstanding;
(i) purchase money Indebtedness incurred by the Company or any Subsidiary prior to or within 270 days of the acquisition, lease or improvement of the respective asset permitted under this Agreement in order to finance such acquisition or improvement, and any Restricted Subsidiary may incur Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof in an aggregate principal amount not to exceed $25,000,000 at any one time outstanding;
(including Acquired Indebtedness), issue shares j) Indebtedness of Disqualified Stock the Company in respect of the Senior Notes and issue shares of preferred stock, (1) if any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness, Disqualified Stock ;
(k) Indebtedness in connection with Permitted Receivables Financings in an aggregate principal amount not to exceed $50,000,000 at any one time outstanding;
(l) Indebtedness in respect of letters of credit issued for the account of the Company or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted its Subsidiaries (including other than letters of credit issued as guaranties for Indebtedness of the Company and its Subsidiaries);
(m) Subordinated Indebtedness of the Company or any of its Subsidiaries (other than LFNY);
(n) additional Indebtedness of the Company or any of its Subsidiaries in an aggregate principal amount (for the purposes of such calculation Company and all Subsidiaries) not to exceed $125,000,000 at any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations)one time outstanding; provided that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such additional Indebtedness, Disqualified Stock the Leverage Ratio shall not be greater than 3.5 to 1.0;
(o) Guarantee Obligations of the Company and its Subsidiaries in respect of Indebtedness of the Company or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted its Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to so long as the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred permitted under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documentsthis Agreement;
(bp) Indebtedness represented by under the Unsecured Asset Sale Bridge (including Intesa Notes and any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Permitted Refinancing Indebtedness incurred to refinance any other Refinance such Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 ; and (yq) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or selfSpecified Non-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Recourse Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 4 contracts
Sources: Credit Agreement (Lazard LTD), Credit Agreement (Lazard Group LLC), Credit Agreement (Lazard LTD)
Limitation on Indebtedness. Holdings will not, and (a) The Borrower will not permit any Restricted Subsidiary of its Subsidiaries to create, incur, issue, assume, guarantee incur or otherwise become liable, contingently assume or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on as of the Closing Date listed on Schedule 10.1 and any refinancings, refundings, renewals or extensions thereof (without any increase in the principal amount thereof, other than by the amount of any necessary pre-payment premiums, unpaid accrued interest and other costs of refinancing, or any shortening of the final maturity of any principal amount thereof to a date prior to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Revolving Credit Party to another Credit PartyTermination Date);
(dii) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings Insurance Subsidiary incurred or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business)its business or in securing insurance-related obligations (that do not constitute Indebtedness) of such Insurance Subsidiary and letters of credit, bank guarantees, surety bonds or similar instruments issued for the account of any Insurance Subsidiary in respect the ordinary course of workers’ compensation claims, deferred compensation, performance its business or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or selfin securing insurance-insurance or other Indebtedness with respect to reimbursement or indemnification type related obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance(that do not constitute Indebtedness) of such Insurance Subsidiary;
(fiii) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees guarantees, surety and appeal bonds, or similar instruments related thereto, in each case, performance bonds or other obligations of a like nature arising in the ordinary course of business or consistent with past practiceand not for capital raising purposes and issued for the account of any Non-Regulated Operating Subsidiary;
(iiv) Indebtednessshort-term Indebtedness (i.e. with a maturity of less than one year when issued, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in provided that such Indebtedness may include an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) option to extend for up to 100% an additional one year period) of any Insurance Subsidiary incurred to provide short-term liquidity to facilitate claims payment in the net cash proceeds received by Holdings since immediately event of catastrophe;
(v) Indebtedness of a Subsidiary acquired after the Closing Date from or a corporation merged into or consolidated with a Subsidiary after the issue or sale Closing Date and Indebtedness assumed in connection with the acquisition of Equity Interests of Holdings or cash contributed to the capital of Holdings (assets, which Indebtedness, in each case, exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event, as well as any refinancings, refunds, renewals or extensions of such Indebtedness (without increase in the principal amount thereof other than Excluded Contributionsby the amount of any necessary pre-payment premiums, unpaid accrued interest and other costs of refinancing);
(vi) Indebtedness owing or issued by a Subsidiary to any Cure Amount other Subsidiary or proceeds to the Borrower;
(vii) Guarantee Obligations made by a Subsidiary in respect of Disqualified Stock obligations of another Subsidiary;
(viii) Indebtedness under the Loan Documents;
(ix) Indebtedness represented by Qualified Securities, Trust Preferred Securities or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) Mandatory Convertible Securities (except to the extent such net cash proceeds Indebtedness is included in the calculation of Total Consolidated Debt);
(x) Indebtedness of any mutual fund Subsidiary incurred to provide short-term (i.e. not anticipated to be outstanding for more than one year when incurred) liquidity to facilitate redemption payments by such mutual fund Subsidiary; and
(xi) other Indebtedness of such Subsidiaries, provided that at the time such Indebtedness is incurred or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investmentsissued, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which of such Indebtedness when aggregated with the principal amount and liquidation preference of added to all other Indebtedness, Disqualified Stock and preferred stock then outstanding and Indebtedness incurred or issued pursuant to this clause (l)(ii)xi) and then outstanding, does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.015% of the Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes Net Worth of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theBorrower.
Appears in 3 contracts
Sources: Credit Agreement (Symetra Financial CORP), Credit Agreement (Symetra Financial CORP), Credit Agreement (Symetra Financial CORP)
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issueassume or suffer to exist any Indebtedness, assume, guarantee except:
(a) Indebtedness arising under this Agreement or otherwise become liable, contingently the Notes;
(b) Indebtedness of any Wholly Owned Subsidiary of the Company to the Company or otherwise any other Wholly Owned Subsidiary of the Company;
(collectively, “incur” c) Indebtedness outstanding on the Restatement Effective Date and collectively, an “incurrence”listed on Schedule 7.2 and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(d) with respect to any Indebtedness of the Company;
(e) secured Broker-Dealer Indebtedness (including Acquired Indebtednessthat of LFNY) and Holdings will not issue any shares Indebtedness of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stockLazard Frères Banque; provided that Holdingsafter giving effect to the incurrence of any unsecured Indebtedness by Lazard Frères Banque or LFNY, as the case may be, permitted under this Section 7.2(e), the Borrowers aggregate of its unencumbered assets shall exceed the aggregate of its unsecured Indebtedness;
(f) Indebtedness of a Subsidiary acquired after the Restatement Effective Date or a corporation or other entity merged into or consolidated with the Company or any Subsidiary after the Restatement Effective Date and their Restricted Subsidiaries may incur Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case, exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event and where such acquisition, merger or consolidation is permitted by this Agreement and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness (including Acquired whether such Permitted Refinancing Indebtedness is incurred substantially concurrently with the consummation of such acquisition, merger or consolidation or thereafter); provided that, immediately after giving effect to the acquisition or assumption of such Indebtedness (other than Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness), the Company shall be in pro forma compliance with the financial covenant set forth in Section 7.1(a);
(g) [Reserved];
(h) additional Capital Lease Obligations in an aggregate principal amount not to exceed $40,000,000 at any one time outstanding;
(i) purchase money Indebtedness incurred by any Subsidiary of the Company prior to or issue shares within 270 days of Disqualified Stockthe acquisition, lease or improvement of the respective asset permitted under this Agreement in order to finance such acquisition or improvement, and any Restricted Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof in an aggregate principal amount not to exceed $50,000,000 at any one time outstanding;
(j) [Reserved];
(k) Indebtedness in connection with Permitted Receivables Financings in an aggregate principal amount not to exceed $50,000,000 at any one time outstanding;
(l) Indebtedness in respect of letters of credit issued for the account of the Subsidiaries (other than letters of credit issued as guaranties for Indebtedness of the Company and its Subsidiaries);
(m) Subordinated Indebtedness of any of the Subsidiaries;
(n) additional Indebtedness of any of the Subsidiaries in an aggregate principal amount (for all Subsidiaries) not to exceed $250,000,000 at any one time outstanding, which, for the avoidance of doubt, may include Indebtedness of any Subsidiary may incur Indebtedness (including Acquired Indebtedness)incurred in order to finance the improvement of, issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a mortgage or other Lien on on, any or all of the Collateral on a pari passu basis with the Liens on the Collateral securing the ObligationsParis Properties, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations)Permitted Refinancing Indebtedness in respect thereof; provided that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such additional Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis Company shall be in pro forma compliance with the Liens on financial covenant set forth in Section 7.1(a);
(o) Guarantee Obligations of the Collateral securing Subsidiaries in respect of Indebtedness of the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Company or its Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to so long as the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00permitted under this Agreement; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:and
(ap) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to onSpecified Non-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Recourse Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 3 contracts
Sources: Credit Agreement (Lazard, Inc.), Credit Agreement (Lazard LTD), Credit Agreement (Lazard Group LLC)
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issueassume or suffer to exist any Indebtedness, assumeor permit any preferred stock to be issued or outstanding, guarantee except:
(a) Indebtedness of such Loan Party under this Agreement and the other Loan Documents;
(b) Indebtedness in respect of purchase money security interests, Financing Leases or otherwise become liableSynthetic Leases; provided that the sum of the aggregate amount of Indebtedness permitted under Sections 8.2(b), contingently 8.2(g), 8.2(i), and 8.2(l) does not exceed ten percent (10%) of the Combined Capital at any one time outstanding;
(c) Indebtedness outstanding on the date hereof and listed on Schedule 8.2, or otherwise any refinancings, refundings, renewals or extensions thereof (collectivelysuch refinanced, refunded, renewed or extended Indebtedness, “incur” Permitted Refinancing Indebtedness”); provided that (i) the stated amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension (except to the extent of non-cash interest and collectivelythe reasonable and customary transactional costs and expenses incurred by the Loan Parties in connection with incurring such Permitted Refinancing Indebtedness), (ii) such refinancing, refunding, renewal or extended Indebtedness shall (A) not have a stated final maturity prior to the final maturity date of the Indebtedness being refinanced, refunded, renewed or extended and (B) have an “average life to maturity equal to or greater than such Indebtedness, (iii) the terms of such refinancing, refunding, renewal or extension shall not be more restrictive than the terms of such Indebtedness when taken as a whole, (iv) any guarantee entered into in connection with such refinancing, refunding, renewal or extension that is not a refinancing of an existing guarantee of such Indebtedness shall not be permitted under this Section 8.2(c) and (v) if the Indebtedness being refinanced, refunded, renewed or extended is subordinated, such Permitted Refinancing Indebtedness shall be subordinated to at least the same extent, and on terms at least as favorable to the Lenders, as the Indebtedness being refinanced, refunded, renewed or extended;
(d) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business or other cash management services in the ordinary course of business; provided that such Indebtedness (other than credit or purchase cards) is extinguished within one (1) Business Day after notification to the Borrowers’ Agent of its incurrence”;
(e) Indebtedness owed by any Loan Party to any other Loan Party;
(f) Contingent Obligations of a Loan Party with respect to Indebtedness of another Loan Party that is permitted hereunder;
(g) Indebtedness of any Person that becomes a Subsidiary after the date hereof pursuant to a Permitted Acquisition and Indebtedness (including Acquired Indebtedness) and Holdings will not issue of any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, Person secured by assets acquired in the case of Restricted Subsidiaries that are not Guarantors, preferred stocka Permitted Acquisition; provided that Holdings, (i) such Indebtedness exists at the Borrowers time such Person becomes a Subsidiary or such assets are acquired and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) is not created in contemplation of or issue shares of Disqualified Stockin connection with such Person becoming a Subsidiary or such assets being acquired, and any Restricted Subsidiary may incur (ii) the sum of the aggregate amount of Indebtedness (including Acquired Indebtednesspermitted under Sections 8.2(b), issue shares 8.2(g), 8.2(i), and 8.2(l) does not exceed ten percent (10%) of Disqualified Stock the Combined Capital at any one time outstanding;
(h) Indebtedness of any Loan Party in respect of performance bonds, bid bonds, appeal bonds, surety bonds and issue shares similar obligations, in each case provided in the ordinary course of preferred stockbusiness;
(i) Permitted Non-Compete Indebtedness and other obligations issued, undertaken or assumed as the deferred purchase price of property or services; provided that the sum of the aggregate amount of Indebtedness permitted under Sections 8.2(b), 8.2(g), 8.2(i), and 8.2(l) does not exceed ten percent (110%) if of the Combined Capital at any one time outstanding;
(j) unsecured private placement or other term Indebtedness of a Credit Party; provided, that
(i) such Indebtedness does not impose any financial covenants on any Credit Party that are more onerous than the covenants set forth in this Agreement;
(ii) such Indebtedness shall not require any scheduled payment on account of principal (whether by redemption, purchase, retirement, defeasance, set-off or otherwise) prior to six (6) months following the Commitment Termination Date; and
(iii) (x) the Loan Parties are in compliance with Section 8.1 immediately after giving pro forma effect to the incurrence of any such Indebtedness, Disqualified Stock ; and (y) no Default or shares Event of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings Default exists both immediately before and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);.
(k) obligations in respect Indebtedness consisting of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect the financing of letters of credit, bank guarantees or similar instruments related thereto, in each case, insurance premiums in the ordinary course of business or consistent with past practice;to defer the cost the underlying policy; and
(il) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing additional unsecured Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted SubsidiaryLoan Parties; provided that the sum of the aggregate amount of Indebtedness (other than Acquired Indebtednesspermitted under Sections 8.2(b), Disqualified Stock 8.2(g), 8.2(i), and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are 8.2(l) does not Guarantors under exceed ten percent (i) the first paragraph of this Section 10.1 or (ii) clause (c10%) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence Combined Capital at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 3 contracts
Sources: Credit Agreement (Cypress Energy Partners, L.P.), Credit Agreement (Cypress Energy Partners, L.P.), Credit Agreement (Cypress Energy Partners, L.P.)
Limitation on Indebtedness. Holdings will not, and The Borrower will not permit any Restricted Subsidiary of its Subsidiaries to create, incur, issue, assume, guarantee incur or otherwise become liable, contingently assume or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising under outstanding as of the Closing Date and any refinancings, refundings, renewals or extensions thereof (without any increase in the principal amount thereof, other than by the amount of any necessary pre-payment premiums, unpaid accrued interest and other costs of refinancing, or any shortening of the final maturity of any principal amount thereof to a date prior to the Revolving Credit DocumentsTermination Date);
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings Insurance Subsidiary incurred or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business)its business or in securing insurance-related obligations (that do not constitute Indebtedness) of such Insurance Subsidiary and letters of credit, bank guarantees, surety bonds or similar instruments issued for the account of any Insurance Subsidiary in respect the ordinary course of workers’ compensation claims, deferred compensation, performance its business or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or selfin securing insurance-insurance or other Indebtedness with respect to reimbursement or indemnification type related obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance(that do not constitute Indebtedness) of such Insurance Subsidiary;
(fc) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees guarantees, bids, leases, statutory obligations, surety and appeal bonds, or similar instruments related thereto, in each case, performance bonds or other obligations of a like nature arising in the ordinary course of business and not for capital raising purposes and issued for the account of any Non-Regulated Operating Subsidiary;
(d) short-term Indebtedness (i.e. with a maturity of less than one year when issued, provided that such Indebtedness may include an option to extend for up to an additional one year period) of any Insurance Subsidiary incurred or consistent issued to provide short-term liquidity to facilitate claims payment in the event of catastrophe;
(e) Indebtedness of a Subsidiary acquired after the Closing Date or a corporation merged into or consolidated with past practicea Subsidiary after the Closing Date and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness, in each case, exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event, as well as any refinancings, refunds, renewals or extensions of such Indebtedness (without increase in the principal amount thereof other than by the amount of any necessary pre-payment premiums, unpaid accrued interest and other costs of refinancing);
(f) Indebtedness owing or issued by a Subsidiary to any other Subsidiary or to the Borrower;
(g) Guarantee Obligations made by the Guarantors in respect of the obligations of the Borrower or by a Subsidiary in respect of obligations of another Subsidiary;
(h) Indebtedness under the Loan Documents;
(i) IndebtednessIndebtedness of any Guarantor;
(j) Indebtedness represented by Qualified Securities, Disqualified Stock and preferred stock of Holdings Trust Preferred Securities or any Restricted Subsidiary in an aggregate principal amount or liquidation preference Mandatory Convertible Securities (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed except to the capital extent such Indebtedness is included in the calculation of Holdings Total Consolidated Debt);
(in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(Ck) to the extent such net cash proceeds or cash constituting Indebtedness, liabilities representing collateral held with respect to securities lending activities and not exceeding 10% of the Borrower’s consolidated investment assets as of the end of the most recent fiscal quarter for which consolidated financial statements have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges furnished pursuant to Section 10.5(b6.1(a); and
(l) other Indebtedness of such Subsidiaries, provided that at the time such Indebtedness is incurred or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of issued, the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which of such Indebtedness when aggregated with the principal amount and liquidation preference of added to all other Indebtedness, Disqualified Stock and preferred stock then outstanding and Indebtedness incurred or issued pursuant to this clause (l)(ii)l) and then outstanding, does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.015% of the Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes Net Worth of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theBorrower.
Appears in 3 contracts
Sources: Credit Agreement (White Mountains Insurance Group LTD), Credit Agreement (White Mountains Insurance Group LTD), Credit Agreement (White Mountains Insurance Group LTD)
Limitation on Indebtedness. Holdings will notIncur, assume or suffer to exist any Indebtedness of any Material Subsidiary except:
(a) Indebtedness in existence on the Closing Date, or required to be incurred pursuant to a contractual obligation in existence on the Closing Date and any refinancing, extensions, renewals or modifications thereof, so long as such refinancing, renewals, extensions or modifications (i) do not result in an increase in the principal amount of the Indebtedness so refinanced, renewed, extended or modified (other than increases to pay fees and expenses incurred in connection therewith), and will not permit any Restricted Subsidiary to create, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”ii) rank pari-passu with respect to any the Indebtedness being refinanced;
(b) Indebtedness (including Acquired IndebtednessCapital Leases) incurred in connection with or as a component of the purchase price of any property of any Material Subsidiary or that was existing on any property acquired by such Material Subsidiary at the time of acquisition thereof by such Material Subsidiary and Holdings will assumed in connection with such acquisition (other than Indebtedness issued in connection with, or in anticipation of, such acquisitions) or otherwise incurred to finance the acquisition, construction or improvement of any property (including, without limitation, Indebtedness incurred to finance the cost of acquisition or construction of such property within 24 months after such acquisition or the completion of such improvement or construction); and any refinancing, extension or renewals of such Indebtedness as long as such refinancing, extensions, renewals or modifications (i) do not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, result in an increase in the case principal amount of Restricted Subsidiaries that are not Guarantorsthe Indebtedness so refinanced, preferred stock; provided that Holdingsrenewed, the Borrowers extended or modified (other than increases to pay fees and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtednessexpenses incurred in connection therewith), issue shares (ii) do not result in a change of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence obligors in respect of such Indebtedness and (iii) rank pari-passu with the use Indebtedness being refinanced;
(c) Guaranty Obligations;
(d) Indebtedness owing by any Material Subsidiary to the Borrower or any other Subsidiary;
(e) Indebtedness of proceeds thereofany Material Subsidiary issued and outstanding prior to the date on which such Person became a Subsidiary of the Borrower (other than Indebtedness issued in connection with, or in anticipation of, such Person becoming a Subsidiary of the Borrower); provided that immediately prior and on a Pro Forma Basis would not exceed 5.00:1.00after giving effect to, (2) if such Person becoming a Subsidiary of the Borrower, no Default or Event of Default shall occur or then be continuing and the aggregate principal amount of such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis when added to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the aggregate outstanding principal amount of Indebtedness permitted by paragraphs (other than Acquired Indebtedness)f) and (g) below, Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.015% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit DocumentsNet Worth and $200,000,000;
(bf) any refinancing, renewal, extension or modification of Indebtedness represented by the Unsecured Asset Sale Bridge under paragraph (including any guarantee thereofe) in the aggregate amount not to exceed €500,000,000;
(c) above so long as such refinancing, renewals, extensions or modifications (i) do not result in an increase in the principal amount of the Indebtedness so refinanced, renewed, extended or modified (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 other than increases to the Disclosure Letter pay fees and expenses incurred in connection therewith), and (ii) intercompany rank pari-passu with the Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)being refinanced;
(dg) other Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Material Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with added to the aggregate outstanding principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause Indebtedness permitted by paragraphs (de) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d)f) above, does not exceed the greater of (x) $550,000,000 and (y) 50.015% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clauseNet Worth and $200,000,000;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clauseSecuritization Indebtedness;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations derivatives transactions entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practicepursuant to hedging programs;
(ij) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary Indebtedness under the Landal Facilities in an aggregate principal amount or liquidation preference not to exceed $250,000,000;
(together with any Refinancing k) Indebtedness in respect thereof) up to 100% of under the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder WVRAP Facilities in an aggregate principal amount or liquidation preferencenot to exceed $200,000,000, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness permitted under this Section 6.1(k) shall be reduced in an equal amount by the amount of Securitization Indebtedness incurred by WVRAP or any of its Subsidiaries;
(l) Non-Recourse Indebtedness in an aggregate principal amount not to exceed $100,000,000;
(m) Indebtedness of any Subsidiary issued and outstanding prior to the date on which such Person became a Material Subsidiary (other than Acquired Indebtedness)Indebtedness issued in connection with, Disqualified Stock or in anticipation of, such Person becoming a Material Subsidiary) and preferred stock that may be incurred pursuant to the foregoingany refinancing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under renewal, extension or modification of such Indebtedness so long as such refinancing, renewals, extensions or modifications (i) do not result in an increase in the first paragraph principal amount of this Section 10.1 the Indebtedness so refinanced, renewed, extended, or modified (other than increases to pay fees and expenses incurred in connection therewith) and (ii) clause rank pari-passu with the Indebtedness being refinanced; and
(cn) Indebtedness of any Loan Party pursuant to any Fundamental Document. If the Material Subsidiary’s action or event meets the criteria of more than one of the definition types of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantorsdescribed in the clauses above, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any Borrower in its sole discretion may classify such action or event in one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof more clauses (including designating an Unrestricted Subsidiary a Restricted Subsidiaryin part under one such clause and in part under another such clause); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 3 contracts
Sources: Credit Agreement (Wyndham Worldwide Corp), Credit Agreement (Wyndham Worldwide Corp), Credit Agreement (Wyndham Worldwide Corp)
Limitation on Indebtedness. Holdings will (a) The Company shall not, and will shall not permit any Restricted Subsidiary to, Incur any Indebtedness; provided, however, that the Company or any Guarantor may Incur Indebtedness if the Company’s Consolidated Fixed Charge Coverage Ratio would exceed 2.0 to create1.0, incurafter giving effect to:
(i) the Incurrence of such Indebtedness as if such Indebtedness was Incurred at the beginning of the Reference Period and (if applicable) the application of the net proceeds thereof to repay or defease other Indebtedness as if the application of such net proceeds occurred at the beginning of the Reference Period;
(ii) the Incurrence and retirement (including any Indebtedness that has been defeased) of any other Indebtedness since the first day of the Reference Period as if such Indebtedness was Incurred or retired at the beginning of the Reference Period;
(iii) the execution or termination of any management agreement pursuant to which the Company or any Restricted Subsidiary was or will be paid a management fee since the first day of the Reference Period including any execution or termination which will be effective contemporaneously with the Incurrence of such Indebtedness, issueas if such execution or termination occurred at the beginning of the Reference Period; and
(iv) the acquisition or disposition of any Property or any company or business by the Company or any Restricted Subsidiary since the first day of the Reference Period including any acquisition or disposition which will be consummated contemporaneously with the Incurrence of such Indebtedness, assumeas if such acquisition or disposition occurred at the beginning of the Reference Period, guarantee including without limitation any net reduction of lease payments in connection with any acquisition of Property and any related income or otherwise become liableexpense. For purposes of such computation, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Indebtedness that bears interest at a variable rate, such Indebtedness shall be deemed to bear interest at the applicable interest rate (or weighted average interest rate, if there are multiple applicable interest rates) on the date such Indebtedness is Incurred or repaid.
(b) Notwithstanding the foregoing limitation, the Company or any Restricted Subsidiary, as specified below, may Incur the following Indebtedness:
(i) Indebtedness of the Company represented by the Initial Notes and of the Guarantors under the Note Guarantees and any Exchange Notes and related Note Guarantees, if any, that may be issued pursuant to the Registration Rights Agreement;
(including Acquired Indebtednessii) and Holdings will not issue any shares Indebtedness of Disqualified Stock and will not permit the Company or any Restricted Subsidiary outstanding on the Issue Date (other than Indebtedness under clauses (i) and (iii));
(iii) Indebtedness of the Company or any Restricted Subsidiary under the Credit Facility in an aggregate amount outstanding at any time not to issue exceed the greater of (A) $2.75 billion, and (B) 4.5 times Consolidated EBITDA during the Reference Period (after giving pro forma effect to the acquisition or disposition of any shares company or business by the Company or any Restricted Subsidiary since the first day of Disqualified Stock orthe Reference Period including any acquisition or disposition which will be consummated contemporaneously with the Incurrence of Indebtedness under this clause (iii), as if such acquisition or disposition occurred at the beginning of the Reference Period);
(iv) Indebtedness of the Company or a Restricted Subsidiary owing to and held by a Restricted Subsidiary or the Company; provided, however, that (A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes then due, in the case of the Company, or the Note Guarantees, in the case of a Guarantor, and (B) any subsequent issuance or transfer of any Capital Stock or other event that results in any such Restricted Subsidiaries that are not Guarantors, preferred stockSubsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness except to the Company or a Restricted Subsidiary shall be deemed in each case to constitute the Incurrence of such Indebtedness by the issuer thereof;
(v) Indebtedness of the Company or a Restricted Subsidiary under Interest Rate Agreements; provided that Holdings, the Borrowers obligations under such agreements were entered into in connection with payment obligations on Indebtedness otherwise permitted by the terms of this Section 4.12;
(vi) Indebtedness of the Company or a Restricted Subsidiary under Currency Exchange Protection Agreements; provided that such Currency Exchange Protection Agreements were entered into for the purpose of limiting exchange rate risks and their Restricted Subsidiaries may incur not as speculative investments;
(vii) Indebtedness (including Acquired Indebtedness) of the Company or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness)in connection with one or more letters of credit, issue shares bankers’ acceptances, worker’s compensation claims, surety bonds, appeal bonds, performance bonds or completion guarantees issued in the ordinary course of Disqualified Stock business or pursuant to self-insurance and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis similar obligations and not in connection with the Liens on borrowing of money or the Collateral securing obtaining of advances or credit;
(viii) Indebtedness of the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Company or any Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, Subsidiary outstanding under Permitted FF&E Financings which are either (A) Non-Recourse Indebtedness of the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings Company and the its Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) limited in amount (including all Permitted Refinancing Indebtedness Incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred pursuant to this clause (b)(viii)) for each Gaming Facility owned or leased by the Fixed Charge Coverage Ratio Company or any of Holdings and the its Restricted Subsidiaries, after giving effect Subsidiaries to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater lesser of (x) $550,000,000 the amount of FF&E used in such Gaming Facility and financed by such Permitted FF&E Financing or (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documents$25,000,000;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (iix) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Capital Lease Obligations), Disqualified Stock and preferred stock incurred ) Incurred by Holdings the Company or any of its Restricted Subsidiary, Subsidiaries to finance (whether prior to or within 270 days after) the purchaseacquisition, lease, construction, installation, maintenancerepair, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant not to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (xA) $550,000,000 150,000,000 and (yB) 50.05% of the Company’s Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Total Assets;
(ex) Indebtedness incurred by Holdings consisting of the financing of insurance premiums or any Restricted Subsidiary (including letter of credit take-or-pay obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued contained in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurancesupply arrangements;
(fxi) Indebtedness arising from agreements of Holdings the Company or a any Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, other than guarantees of Indebtedness incurred Person otherwise permitted by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisitionthis Indenture;
(gxii) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, incurred in the ordinary course of business or consistent with past practicesupporting obligations of suppliers, lessees and vendors;
(ixiii) Acquired Debt and any other Indebtedness incurred to finance a merger, consolidation or other acquisition; provided that immediately after giving effect to the incurrence of such Acquired Debt and such other Indebtedness, Disqualified Stock as the case may be, on a pro forma basis as if such incurrence (and preferred stock of Holdings the related merger, consolidation or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereofother acquisition) up to 100% had occurred at the beginning of the net cash proceeds received by Holdings since applicable Reference Period, the Company’s Consolidated Fixed Charge Coverage Ratio would be equal to or greater than the Company’s Consolidated Fixed Charge Coverage Ratio immediately after prior to such merger, consolidation or other acquisition;
(xiv) Indebtedness of the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) Company to the extent such the net cash proceeds or cash have not been applied pursuant thereof are promptly deposited to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(bdefease the Notes as described below under Article 8;
(xv) or to make Permitted Investments Indebtedness (other than Permitted Investments specified in clauses (a) and (cincluding under the Credit Facility) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings Company or any Restricted Subsidiary not otherwise permitted hereunder to be Incurred pursuant to the provisions of this section in an aggregate principal amount outstanding as of the date of any Incurrence of such Indebtedness not to exceed 7.5% of the Company’s Consolidated Total Assets; or
(xvi) Permitted Refinancing Indebtedness Incurred by the Company or liquidation preference, which when aggregated with any Restricted Subsidiary in respect of Indebtedness of the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then Company or any Restricted Subsidiary outstanding and incurred pursuant to the provisions of clause (a) above or such clauses (b)(i), (ii), (viii), (ix), (xiii), and this clause (l)(iib)(xvi); provided, however, any such Permitted Refinancing Indebtedness may be Incurred up to 90 days prior to the repayment, repurchase or redemption of the Indebtedness being refinanced, redeemed or repaid with such Permitted Refinancing Indebtedness; provided, further, that prior to any repayment, repurchase or redemption of the Indebtedness being refinanced with such Permitted Refinancing Indebtedness, the Company or the applicable Restricted Subsidiary may temporarily invest the proceeds of such Permitted Refinancing Indebtedness in Temporary Cash Investments or use the proceeds of such Permitted Refinancing Indebtedness to pay down Indebtedness under the revolving credit portion of the Credit Facility.
(c) For purposes of determining compliance with this Section 4.12, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories described in clauses (b)(i) through (xvi) above, or is entitled to be Incurred pursuant to clause (a) above, the Company will be permitted to (i) classify such item of Indebtedness on the date of its Incurrence in any manner that complies with this covenant and (ii) divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in clauses (b)(i) through (xvi) above or as Incurred pursuant to clause (a) above. The Company may reclassify such Indebtedness from time to time in its sole discretion and may classify any item of Indebtedness in part under one or more of the categories described in clauses (b)(i) through (xvi) above and/or in part as Indebtedness entitled to be Incurred pursuant to clause (a) above. Notwithstanding the foregoing, Indebtedness outstanding under the Credit Facility on the Issue Date, after giving effect to the application of the proceeds from the issuance of the Notes that are applied on the Issue Date, initially will be deemed to have been Incurred on such date under clause (b)(iii), does not at and may later be reclassified.
(d) Accrual of interest, the accretion of principal amount, the payment of interest on any one time outstanding exceed Indebtedness in the greater form of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any additional Indebtedness, fair value adjustments to the amount of Indebtedness and the payment of dividends in the form of additional Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease Preferred Stock, as applicable, in each case will not be deemed to be deemed incurred or outstanding an Incurrence of Indebtedness for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes covenant. In addition, a Guarantee of Indebtedness of the first paragraph Company or of this Section 10.1 from and after the first date on which Holdings or such a Restricted Subsidiary could have incurred such Indebtednesswill not constitute a separate Incurrence, Disqualified Stock or preferred stock under the first paragraph amount outstanding, of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to Indebtedness so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent long as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary so Guaranteed was Incurred in accordance with the terms hereof of this Indenture. The Company may rely on internal or publicly reported financial reports even though there may be subsequent adjustments (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (ireview and audit adjustments) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisitionfinancial statements. For the avoidance of doubt, merger, consolidation any Incurrence of Indebtedness which is based upon or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral made in reliance on a pari passu basis computation based on such internal or publicly reported financial statements, shall be deemed to continue to comply with the Liens on the Collateral securing the Obligationsapplicable covenant, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior notwithstanding any subsequent adjustments that may result in changes to such acquisition, merger, consolidation internal or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, thepublicly reported financial statements.
Appears in 2 contracts
Sources: Indenture (Boyd Acquisition I, LLC), Indenture (Boyd Gaming Corp)
Limitation on Indebtedness. Holdings The Borrower will not, and will not permit any Restricted Subsidiary to of its Subsidiaries to, contract, create, incur, issueassume or suffer to exist any new Indebtedness; provided, assumehowever, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount provisions of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors this SECTION 8.10 shall not exceed prevent the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toBorrower from:
(a) until the refinancing of the Indebtedness arising Subject to the Refinancing shall have not been closed, to incur in any new Indebtedness to be exclusively applied to:
(i) purchase at a discount any portion of the Indebtedness Subject to the Refinancing (the "Discount Indebtedness"); provided further, however, that if under the Credit Documents;Discount Indebtedness the Borrower shall have agreed to make on or before December 31, 2004 one or more principal repayments which in their aggregate exceed the amount of US$2,000,000, then the Borrower shall have to prepay the last Scheduled Repayment of US$297,098.99 owed to the Lender hereunder due on June 30, 2006, on the same date that the Borrower shall have to make under the Discount Indebtedness a principal repayment in an amount which, together with any other principal repayments that shall have been previously made under the Discount Indebtedness (either voluntary or mandatory), exceeds the amount of US$2,000,000; and
(ii) finance working capital of the Borrower or of its Subsidiaries, up to an aggregate amount of US$5,000,000.
(b) after the refinancing of the Indebtedness represented by Subject to the Unsecured Asset Sale Bridge (including Refinancing shall have been closed, to incur in any guarantee thereof) in new Indebtedness solely for the aggregate amount not to exceed €500,000,000;purpose of:
(c) (i) purchasing Fixed Assets, provided that each such new Indebtedness (including any unused commitment) outstanding on shall not exceed the Closing Date listed on Schedule 10.1 to 90% of the Disclosure Letter and acquisition cost of each such Fixed Asset; and
(ii) intercompany Indebtedness finance working capital of the Borrower or of its Subsidiaries, up to such aggregate amount (including any unused commitmentif any) outstanding on the Closing Date listed on Schedule 10.1 permitted to the Disclosure Letter (other than intercompany Indebtedness owed Borrower under any agreement that shall have been entered by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed Borrower in connection with the acquisition or disposition refinancing of any business, assets or a Subsidiary or other Person, other than guarantees of the Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment Subject to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theRefinancing.
Appears in 2 contracts
Sources: Loan Agreement (Mastellone Brothers Inc), Loan Agreement (Leitesol Industry & Commerce Inc.)
Limitation on Indebtedness. Holdings will notThe Borrower shall not create, and will not incur, assume or suffer to exist, or permit any Restricted Subsidiary of its Subsidiaries to create, incur, issueassume or suffer to exist, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness except (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect subject to the incurrence final sentence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) this Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:7.02):
(a) the Loans and any other Indebtedness arising under the Credit Documentsthis Agreement or any other Loan Document;
(b) Indebtedness represented existing on the Effective Date and set forth in Schedule 7.02, and any extension, renewal, refunding and refinancing thereof, provided that after giving effect to such extension, renewal, refunding or refinancing, (A) the principal amount thereof is not increased, (B) neither the tenor nor the remaining average life thereof is reduced and (C) the interest rate thereon is not increased; provided, however, that the industrial revenue bonds identified by an asterisk in Schedule 7.02 may be refinanced at an interest rate higher than the Unsecured Asset Sale Bridge (including any guarantee thereof) rate in the aggregate amount not effect immediately prior to exceed €500,000,000such refinancing;
(c) (i) Indebtedness (including of the Borrower to any unused commitment) outstanding on of its Subsidiaries, of any wholly-owned Subsidiary of the Closing Date listed on Schedule 10.1 Borrower to the Disclosure Letter and (ii) intercompany Indebtedness (including Borrower or of any unused commitment) outstanding on wholly-owned Subsidiary of the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party Borrower to another Credit Party)Subsidiary of the Borrower;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, appeal bonds required in the ordinary course of business or in connection with the enforcement of rights or claims of the Borrower or its Subsidiaries or in connection with judgments that do not result in a Default or an Event of Default;
(e) trade debt (including Indebtedness for the purchase of farm products from contract growers and other similar suppliers but excluding Indebtedness for Borrowed Money) incurred by the Borrower or any of its Subsidiaries in the ordinary course of business in a manner and to an extent consistent with their past practicepractices and necessary or desirable for the prudent operation of its businesses;
(f) Indebtedness secured by Liens permitted pursuant to Section 7.01 subject to the limitations contained therein;
(g) Indebtedness incurred in connection with the issuance of commercial paper;
(h) Indebtedness under Hedging Agreements entered into in the ordinary course of business to hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct of its business; and
(i) other present and future unsecured Indebtedness provided at the time of, and immediately after giving effect to, the incurrence of such Indebtedness, Disqualified Stock and preferred stock no condition or event shall exist which constitutes an Event of Holdings or any Restricted Subsidiary Default. Notwithstanding anything contained in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed this Agreement to the capital of Holdings (in each casecontrary, other than Excluded Contributionsthe Borrower shall not create, any Cure Amount incur or proceeds of Disqualified Stock assume, or sales of Equity Interests to Holdings or permit any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) Subsidiaries to the extent such net cash proceeds create, incur or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investmentsassume, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments any Priority Debt (other than Permitted Investments specified in clauses (a) and (c) Priority Debt resulting from the securing of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated existing Indebtedness with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(iiExcess Margin Stock), does not at any one time if after giving effect to such creation, incurrence or assumption the aggregate outstanding exceed the greater amount of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) Priority Debt at the time of such creation, incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes assumption would exceed 15% of the first paragraph total consolidated assets (calculated as if the Merger had occurred as of this the Effective Date) of the Borrower and its Subsidiaries at the most recent fiscal quarter end of the Borrower for which financial statements have been delivered under Section 10.1 from and after the first date on which Holdings 6.09(a) or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) (or prior to the first delivery of such financial statements, at the respective dates of the most recent financial statements for the Borrower and IBP referred to in Section 4.05(a) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiumsb), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 2 contracts
Sources: Credit Agreement (Tyson Foods Inc), 364 Day Credit Agreement (Tyson Foods Inc)
Limitation on Indebtedness. Holdings will notThe Borrower shall not create, and will not incur, assume or suffer to exist, or permit any Restricted Subsidiary of its Subsidiaries to create, incur, issueassume or suffer to exist, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness except (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect subject to the incurrence final sentence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) this Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:7.02):
(a) the Loans and any other Indebtedness arising under this Agreement or any other Loan Document and all loans, letters of credit and other Indebtedness under the Three-Year Credit Agreement, the Five-Year Credit Agreement and all "Loan Documents" as defined therein;
(b) Indebtedness represented existing on the Effective Date and set forth in Schedule 7.02, and any extension, renewal, refunding and refinancing thereof, provided that after giving effect to such extension, renewal, refunding or refinancing, (A) the principal amount thereof is not increased, (B) neither the tenor nor the remaining average life thereof is reduced and (C) the interest rate thereon is not increased; provided, however, that the industrial revenue bonds identified by an asterisk in Schedule 7.02 may be refinanced at an interest rate higher than the Unsecured Asset Sale Bridge (including any guarantee thereof) rate in the aggregate amount not effect immediately prior to exceed €500,000,000such refinancing;
(c) (i) Indebtedness (including of the Borrower to any unused commitment) outstanding on of its Subsidiaries, of any wholly-owned Subsidiary of the Closing Date listed on Schedule 10.1 Borrower to the Disclosure Letter and (ii) intercompany Indebtedness (including Borrower or of any unused commitment) outstanding on wholly-owned Subsidiary of the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party Borrower to another Credit Party)Subsidiary of the Borrower;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, appeal bonds required in the ordinary course of business or in connection with the enforcement of rights or claims of the Borrower or its Subsidiaries or in connection with judgments that do not result in a Default or an Event of Default;
(e) trade debt (including Indebtedness for the purchase of farm products from contract growers and other similar suppliers but excluding Indebtedness for Borrowed Money) incurred by the Borrower or any of its Subsidiaries in the ordinary course of business in a manner and to an extent consistent with their past practicepractices and necessary or desirable for the prudent operation of its businesses;
(f) Indebtedness secured by Liens permitted pursuant to Section 7.01 subject to the limitations contained therein;
(g) Indebtedness incurred in connection with the issuance of commercial paper;
(h) Indebtedness under Hedging Agreements entered into in the ordinary course of business to hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct of its business; and
(i) other present and future unsecured Indebtedness provided at the time of, and immediately after giving effect to, the incurrence of such Indebtedness, Disqualified Stock and preferred stock no condition or event shall exist which constitutes an Event of Holdings or any Restricted Subsidiary Default. Notwithstanding anything contained in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed this Agreement to the capital of Holdings (in each casecontrary, other than Excluded Contributionsthe Borrower shall not create, any Cure Amount incur or proceeds of Disqualified Stock assume, or sales of Equity Interests to Holdings or permit any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) Subsidiaries to the extent such net cash proceeds create, incur or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investmentsassume, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments any Priority Debt (other than Permitted Investments specified in clauses (a) and (c) Priority Debt resulting from the securing of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated existing Indebtedness with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(iiExcess Margin Stock), does not at any one time if after giving effect to such creation, incurrence or assumption the aggregate outstanding exceed the greater amount of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) Priority Debt at the time of such creation, incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes assumption would exceed 15% of the first paragraph total consolidated assets of this the Borrower and its Subsidiaries at the most recent fiscal quarter end of the Borrower for which financial statements have been delivered under Section 10.1 from and after the first date on which Holdings 6.09(a) or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; providedthe first delivery of such financial statements, 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 remaining weighted average life to maturity respective dates of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA most recent financial statements for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary Borrower referred to in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted SubsidiarySection 4.05(a); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 2 contracts
Sources: 364 Day Credit Agreement (Tyson Foods Inc), 364 Day Credit Agreement (Tyson Foods Inc)
Limitation on Indebtedness. Holdings will The Company shall not, and will shall not permit any Restricted Subsidiary to of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise otherwise, with respect to (collectively, “"incur” and collectively, an “incurrence”") with respect to any Indebtedness (including Acquired Indebtedness) and Holdings will not issue secured by any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that HoldingsCollateral. Notwithstanding the foregoing, the Borrowers Company and their Restricted its Subsidiaries may incur Indebtedness the following (including Acquired Indebtedness) or issue shares each of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would which shall be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:given independent effect):
(a) Indebtedness arising of the Company under the Credit DocumentsNotes and this Indenture;
(b) Permitted Working Capital Indebtedness represented by of the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000Company and its Subsidiaries;
(c) (i) Existing Indebtedness (including any unused commitment) outstanding on such Indebtedness contemplated under the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)Plan of Reorganization;
(d) Capital Expenditure Indebtedness, Capital Lease Obligations and purchase money Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock Company and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)its Subsidiaries;
(e) Indebtedness of the Company representing guarantees of Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter one of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters its Subsidiaries pursuant to, and in compliance with, another provision of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurancethis covenant;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with under the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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 acquisitionTerm Loan Agreement;
(g) any Permitted Refinancing Indebtedness representing a replacement, renewal, refinancing or extension of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by under this clausecovenant;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted SubsidiaryHedging Obligations; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;and
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided Indebtedness under the Series B Notes and the Series B Indenture. In the event that any subsequent issuance or transfer the incurrence of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) Holdings would be permitted hereunder, the Company may designate (in the form of an officer's certificate delivered to incur at least $1.00 the Trustee) the particular provision of additional Indebtedness this Indenture pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries which it is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if incurring such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 2 contracts
Sources: Indenture (Wheeling Pittsburgh Corp /De/), Indenture (Wheeling Pittsburgh Steel Corp /De)
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to create, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the
Appears in 2 contracts
Sources: Credit Agreement (GoDaddy Inc.), Credit Agreement (GoDaddy Inc.)
Limitation on Indebtedness. Holdings will notIncur, assume or suffer to exist any Indebtedness of any Material Subsidiary except:
(a) Indebtedness in existence on the Closing Date, or required to be incurred pursuant to a contractual obligation in existence on the Closing Date and any refinancing, extensions, renewals or modifications thereof, so long as such refinancing, renewals, extensions or modifications (i) do not result in an increase in the principal amount of the Indebtedness so refinanced, renewed, extended or modified (other than increases to pay fees and expenses incurred in connection therewith), and will not permit any Restricted Subsidiary to create, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”ii) rank pari-passu with respect to any the Indebtedness being refinanced;
(b) Indebtedness (including Acquired IndebtednessCapital Leases) incurred in connection with or as a component of the purchase price of any property of any Material Subsidiary or that was existing on any property acquired by such Material Subsidiary at the time of acquisition thereof by such Material Subsidiary and Holdings will assumed in connection with such acquisition (other than Indebtedness issued in connection with, or in anticipation of, such acquisitions) or otherwise incurred to finance the acquisition, construction or improvement of any property (including, without limitation, Indebtedness incurred to finance the cost of acquisition or construction of such property within 24 months after such acquisition or the completion of such improvement or construction); and any refinancing, extension or renewals of such Indebtedness as long as such refinancing, extensions, renewals or modifications (i) do not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, result in an increase in the case principal amount of Restricted Subsidiaries that are not Guarantorsthe Indebtedness so refinanced, preferred stock; provided that Holdingsrenewed, the Borrowers extended or modified (other than increases to pay fees and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtednessexpenses incurred in connection therewith), issue shares (ii) do not result in a change of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence obligors in respect of such Indebtedness and (iii) rank pari-passu with the use Indebtedness being refinanced;
(c) Guaranty Obligations;
(d) Indebtedness owing by any Material Subsidiary to the Borrower or any other Subsidiary;
(e) Indebtedness of proceeds thereofany Material Subsidiary issued and outstanding prior to the date on which such Person became a Subsidiary of the Borrower (other than Indebtedness issued in connection with, or in anticipation of, such Person becoming a Subsidiary of the Borrower); provided that immediately prior and on a Pro Forma Basis would not exceed 5.00:1.00after giving effect to, (2) if such Person becoming a Subsidiary of the Borrower, no Default or Event of Default shall occur or then be continuing and the aggregate principal amount of such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis when added to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the aggregate outstanding principal amount of Indebtedness permitted by paragraphs (other than Acquired Indebtedness)f) and (g) below, Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.015% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit DocumentsNet Worth and $200,000,000;
(bf) any refinancing, renewal, extension or modification of Indebtedness represented by the Unsecured Asset Sale Bridge under paragraph (including any guarantee thereofe) in the aggregate amount not to exceed €500,000,000;
(c) above so long as such refinancing, renewals, extensions or modifications (i) do not result in an increase in the principal amount of the Indebtedness so refinanced, renewed, extended or modified (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 other than increases to the Disclosure Letter pay fees and expenses incurred in connection therewith), and (ii) intercompany rank pari-passu with the Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)being refinanced;
(dg) other Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Material Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with added to the aggregate outstanding principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause Indebtedness permitted by paragraphs (de) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d)f) above, does not exceed the greater of (x) $550,000,000 and (y) 50.015% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Net Worth and $200,000,000;
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the
Appears in 2 contracts
Sources: Credit Agreement (Wyndham Worldwide Corp), Credit Agreement (Wyndham Worldwide Corp)
Limitation on Indebtedness. Holdings will notThe Borrower shall not create, and will not incur, assume or suffer to exist, or permit any Restricted Subsidiary of its Subsidiaries to create, incur, issueassume or suffer to exist, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness except (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect subject to the incurrence final sentence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) this Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:7.02):
(a) the Loans and any other Indebtedness arising under the Credit Documentsthis Agreement or any other Loan Document;
(b) Indebtedness represented existing on the Effective Date and set forth in Schedule 7.02, and any extension, renewal, refunding and refinancing thereof, provided that after giving effect to such extension, renewal, refunding or refinancing, (A) the principal amount thereof is not increased, (B) neither the tenor nor the remaining average life thereof is reduced and (C) the interest rate thereon is not increased; provided, however, that the industrial revenue bonds identified by an asterisk in Schedule 7.02 may be refinanced at an interest rate higher than the Unsecured Asset Sale Bridge (including any guarantee thereof) rate in the aggregate amount not effect immediately prior to exceed €500,000,000such refinancing;
(c) (i) Indebtedness (including of the Borrower to any unused commitment) outstanding on of its Subsidiaries, of any wholly-owned Subsidiary of the Closing Date listed on Schedule 10.1 Borrower to the Disclosure Letter and (ii) intercompany Indebtedness (including Borrower or of any unused commitment) outstanding on Subsidiary of the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party Borrower to another Credit Party)wholly-owned Subsidiary of the Borrower;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, appeal bonds required in the ordinary course of business or consistent in connection with past practicethe enforcement of rights or claims of the Borrower or its Subsidiaries or in connection with judgments that do not result in a Default or an Event of Default;
(ie) Indebtedness, Disqualified Stock trade debt (including Indebtedness for the purchase of farm products from contract growers and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing other similar suppliers but excluding Indebtedness in respect thereoffor Borrowed Money) up to 100% of incurred by the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings Borrower or any of its SubsidiariesSubsidiaries in the ordinary course of business in a manner and to an extent consistent with their past practices and necessary or desirable for the prudent operation of its businesses;
(f) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges Indebtedness secured by Liens permitted pursuant to Section 10.5(b7.01 subject to the limitations contained therein;
(g) Indebtedness incurred in connection with the issuance of commercial paper; and
(h) other present and future unsecured Indebtedness provided at the time of, and immediately after giving effect to, the incurrence of such Indebtedness, no condition or event shall exist which constitutes an Event of Default. Notwithstanding anything contained in this Agreement to make Permitted Investments the contrary, the Borrower shall not create, incur or assume, or permit any of its Subsidiaries to create, incur or assume, any Priority Debt (other than Permitted Investments specified in clauses (a) and (c) Priority Debt resulting from the securing of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated existing Indebtedness with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(iiExcess Margin Stock), does not at any one time if after giving effect to such creation, incurrence or assumption the aggregate outstanding exceed the greater amount of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) Priority Debt at the time of such creation, incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes assumption would exceed 15% of the first paragraph total consolidated assets (calculated as if the Merger had occurred as of this the Effective Date) of the Borrower and its Subsidiaries at the most recent fiscal quarter end of the Borrower for which financial statements have been delivered under Section 10.1 from and after the first date on which Holdings 6.09(a) or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) (or prior to the first delivery of such financial statements, at the respective dates of the most recent financial statements for the Borrower and IBP referred to in Section 4.05(a) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiumsb), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 2 contracts
Sources: Receivables Bridge Credit Agreement (Ibp Inc), Credit Agreement (Ibp Inc)
Limitation on Indebtedness. Holdings will The Borrower shall not, and will shall not permit any Restricted Subsidiary to of its Subsidiaries to, create, incur, issue, assume, guarantee suffer to exist, or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) remain directly or indirectly liable with respect to to, any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising under the Credit Documentsincurred pursuant to this Agreement;
(b) Indebtedness represented by consisting of Contingent Obligations in respect of obligations of other Persons (excluding for purposes of this Section 7.04(b) only, Contingent Obligations of the Unsecured Asset Sale Bridge (including any guarantee thereofBorrower in respect of airplane leases of its Subsidiaries not to exceed $50,000,000 in aggregate amount) in the an aggregate amount not to exceed €500,000,000at any one time outstanding 3% of Net Worth;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed identified on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)7.04;
(d) Indebtedness incurred in the ordinary course of business in connection with (including Capitalized Lease Obligations), Disqualified Stock i) Capital Leases which are non-recourse to the Borrower or its Subsidiaries and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personalii) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the money Indebtedness and other Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, Leases in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then not to exceed at any one time outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.03% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Net Worth;
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insuranceObligations under Swap Contracts entered into for hedging purposes;
(f) Indebtedness arising of the Borrower and its Subsidiaries having a maturity of 92 days or less representing borrowings from agreements of Holdings a bank or banks with which the Borrower or such Subsidiary has a Restricted depository relationship, which borrowings shall be fully secured by Cash Equivalents purchased by the Borrower or such Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion proceeds of such business, assets or a Subsidiary for the purpose of financing such acquisitionborrowings;
(g) Indebtedness Obligations incurred in the ordinary course of Holdings business in connection with relocation service transactions and secured by properties which are the subject to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausetransactions;
(h) Indebtedness incurred by the Borrower or a Subsidiary to fund a Permitted Acquisition and Indebtedness of a Restricted Person that becomes a Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if after the Borrowers or a Guarantor incur such Indebtedness owing Closing Date pursuant to a Restricted Subsidiary that is Permitted Acquisition, which Indebtedness existed prior to such Acquisition and was not the Borrowers or a Guarantor, such Indebtedness is subordinated created in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausecontemplation thereof;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clauseIndebtedness under the Public Debentures;
(j) Hedging Obligations so long as no Default or Event of Default has occurred and is continuing at the time of incurrence thereof or after giving effect thereto, unsecured Indebtedness of the Borrower; provided that such Indebtedness (excluding Hedging Obligations entered into i) shall have a stated maturity of no earlier than [To be the date 15 days after Maturity Date], 2011, (ii) except with respect to any conversion or mandatory prepayment of any unsecured Indebtedness which may be convertible, shall not have any scheduled principal payments or provide for speculative purposesany mandatory prepayments or redemptions or repurchases (other than by way of acceleration after default) not otherwise provided to the Lenders hereunder prior to [To be the date 15 days after Maturity Date], 2011; provided, however, with respect to any unsecured Indebtedness which is convertible, the repayment of the principal amount upon the conversion or mandatory prepayment of any such Indebtedness may be made prior to [To be the date 15 days after Maturity Date], 2011 if (A) such payment shall be made solely in additional debt securities (on terms reasonably acceptable to the Administrative Agent) or (B)(x) the Borrower has Sufficient Liquidity and (y) after giving effect to any such payment, the Borrower is in pro forma compliance with each financial covenant set forth in Section 7.09, and (iii) has covenants, defaults and other terms and conditions (other than interest rates) no more restrictive (when taken as a whole) than those contained in this Agreement; provided further that the proceeds from any such Indebtedness shall be used to prepay outstanding Revolving Loans (without a mandatory corresponding reduction in the Aggregate Commitments);
(k) obligations in respect so long as no Default or Event of self-insuranceDefault has occurred and is continuing at the time of incurrence thereof, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect other unsecured Indebtedness of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practiceSubsidiaries;
(il) Indebtedness, Disqualified Stock and preferred stock obligations consisting of Holdings or guarantees of any Restricted Subsidiary of Indebtedness of insurance agents of an Insurance Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up not to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not exceed at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.03% of Consolidated EBITDA for Net Worth;
(m) Indebtedness of the most recently ended Test Period Borrower owing to any Subsidiary, provided that the payment of such Indebtedness is subordinate to the payment of the Obligations in a manner satisfactory to the Administrative Agent;
(calculated on a Pro Forma Basisn) Non-Recourse Debt of the Designated Subsidiaries;
(o) Synthetic Lease Obligations under the Permitted Synthetic Lease and, so long as no Default or Event of Default has occurred and is continuing at the time of incurrence (it being understood that any Indebtednessthereof, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes other Synthetic Lease Obligations, provided the aggregate Attributable Indebtedness in respect of this clause (l)(ii) but shall be deemed incurred for the purposes all of the first paragraph foregoing shall not exceed at any one time outstanding 3% of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii))Net Worth;
(mp) the incurrence so long as no Default or issuance by Holdings or any Restricted Subsidiary Event of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 Default has occurred and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) continuing at the time of incurrence at thereof, Indebtedness arising in connection with a Permitted Accounts Securitization; and
(q) any one time outstandingextensions, renewals or refinancings (ybut not increases) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with of the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theforegoing.
Appears in 2 contracts
Sources: Credit Agreement (Fidelity National Title Group, Inc.), Credit Agreement (Fidelity National Title Group, Inc.)
Limitation on Indebtedness. Holdings will From and after the Closing Date, the Parent Borrower shall not, and will shall not suffer or permit any of its Restricted Subsidiary to Subsidiaries to, create, incur, issue, assume, guarantee suffer to exist, or otherwise become liable, contingently directly or otherwise (collectively, “incur” and collectively, an “incurrence”) indirectly liable with respect to, any Indebtedness, except: (a) the Obligations; (b) Permitted Pari Passu Refinancing Debt, Refinancing Amendment Debt, Permitted Junior Secured Refinancing Debt, Permitted Unsecured Refinancing Debt and any Permitted Refinancing Indebtedness in respect thereof; (c) the Secured Notes and any Permitted Refinancing Indebtedness in respect thereof; (d) Indebtedness owed to any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit the Parent Borrower or any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 and any refinancing thereof with Indebtedness owed to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Parent Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate a principal amount that does not exceed the principal amount (or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each caseaccreted value, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (cif applicable) of the definition thereof) and intercompany Indebtedness so refinanced (ii) Indebtednessit being agreed, Disqualified Stock or preferred stock for the avoidance of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferencedoubt, which when aggregated with that if the principal amount and liquidation preference of all other Indebtednessthe intercompany Indebtedness so refinanced is increased in connection with a refinancing, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease such original principal amount may continue to be deemed incurred or and outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of under this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii5.5(d));
; (m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiumse), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the
Appears in 2 contracts
Sources: Credit Agreement (Fortrea Holdings Inc.), Credit Agreement (Fortrea Holdings Inc.)
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issueassume or suffer to exist any Indebtedness, assume, guarantee except:
(a) Indebtedness arising under this Agreement or otherwise become liable, contingently the Notes;
(b) Indebtedness of any Wholly Owned Subsidiary of the Company to the Company or otherwise any other Wholly Owned Subsidiary of the Company;
(collectively, “incur” c) Indebtedness outstanding on the Restatement Effective Date and collectively, an “incurrence”listed on Schedule 7.2 and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(d) with respect to any Indebtedness of the Company;
(e) secured Broker-Dealer Indebtedness (including Acquired Indebtednessthat of LFNY) and Holdings will not issue any shares Indebtedness of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stockLazard Frères Banque; provided that Holdingsafter giving effect to the incurrence of any unsecured Indebtedness by Lazard Frères Banque or LFNY, as the case may be, permitted under this Section 7.2(e), the Borrowers aggregate of its unencumbered assets shall exceed the aggregate of its unsecured Indebtedness;
(f) Indebtedness of a Subsidiary acquired after the Restatement Effective Date or a corporation or other entity merged into or consolidated with the Company or any Subsidiary after the Restatement Effective Date and their Restricted Subsidiaries may incur Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case, exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event and where such acquisition, merger or consolidation is permitted by this Agreement and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness (including Acquired whether such Permitted Refinancing Indebtedness is incurred substantially concurrently with the consummation of such acquisition, merger or consolidation or thereafter); provided that, immediately after giving effect to the acquisition or assumption of such Indebtedness (other than Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness), the Company shall be in pro forma compliance with the financial covenant set forth in Section 7.1(a);
(g) [Reserved];
(h) additional Capital Lease Obligations in an aggregate principal amount not to exceed $40,000,000 at any one time outstanding;
(i) purchase money Indebtedness incurred by any Subsidiary of the Company prior to or issue shares within 270 days of Disqualified Stockthe acquisition, lease or improvement of the respective asset permitted under this Agreement in order to finance such acquisition or improvement, and any Restricted Subsidiary may incur Permitted Refinancing Indebtedness (including Acquired Indebtedness)in respect thereof, issue shares of Disqualified Stock in an aggregate principal amount that at the time of, and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligationsafter giving effect to, the Consolidated First Lien Secured Debt incurrence thereof in an aggregate principal amount not to Consolidated EBITDA Ratio exceed $25,000,000 at any one time outstanding;
(j) [Reserved];
(k) Indebtedness in connection with Permitted Receivables Financings in an aggregate principal amount not to exceed $50,000,000 at any one time outstanding;
(l) Indebtedness in respect of Holdings and letters of credit issued for the Restricted account of the Subsidiaries (including other than letters of credit issued as guaranties for Indebtedness of the purposes Company and its Subsidiaries);
(m) Subordinated Indebtedness of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on Subsidiaries;
(n) additional Indebtedness of any of the Collateral securing the Obligations)Subsidiaries in an aggregate principal amount (for all Subsidiaries) not to exceed $250,000,000 at any one time outstanding; provided that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such additional Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis Company shall be in pro forma compliance with the Liens on financial covenant set forth in Section 7.1(a);
(o) Guarantee Obligations of the Collateral securing Subsidiaries in respect of Indebtedness of the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Company or its Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to so long as the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00permitted under this Agreement; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:and
(ap) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to onSpecified Non-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Recourse Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 2 contracts
Sources: Credit Agreement (Lazard LTD), Credit Agreement (Lazard Group LLC)
Limitation on Indebtedness. Holdings The Credit Parties will not, and will not permit any Restricted Subsidiary to contract, create, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect permit to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising or existing under this Agreement and the Credit Documentsother Loan Documents and Indebtedness constituting permanent mortgage financing for a hotel property;
(b) Indebtedness represented by of the Unsecured Asset Sale Bridge (including any guarantee thereof) Credit Parties existing as of the Closing Date as referenced in the aggregate financial statements referenced in Section 5.5 (and set out more specifically in Schedule 8.1) hereto and renewals, refinancings or extensions thereof in a principal amount not to exceed €500,000,000in excess of the original principal balance thereof, except if such excess arises from an increase in the value of collateral, as demonstrated by an Appraisal;
(c) Indebtedness of the Credit Parties incurred after the Closing Date consisting of Capital Leases or Indebtedness incurred to provide all or a portion of the purchase price or cost of construction of an asset; provided that (i) such Indebtedness (including any unused commitment) outstanding on when incurred shall not exceed the Closing Date listed on Schedule 10.1 to the Disclosure Letter purchase price or cost of construction of such asset; and (ii) intercompany no such Indebtedness (including any unused commitment) outstanding on shall be refinanced for a principal amount in excess of the Closing Date listed on Schedule 10.1 to original principal balance thereof, except if such excess arises from an increase in the Disclosure Letter (other than intercompany Indebtedness owed value of collateral, as demonstrated by a Credit Party to another Credit Party)an Appraisal;
(d) Unsecured intercompany Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance among the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrenceCredit Parties; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause such Indebtedness shall be (di) in connection with a Permitted Sale Leaseback shall not be subject fully subordinated to the foregoing limitation so long Obligations hereunder on terms reasonably satisfactory to the Agent and (ii) evidenced by promissory notes which shall be pledged to the Agent as Collateral for the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Obligations;
(e) Indebtedness incurred by Holdings and obligations owing under Hedging Agreements entered into in order to manage existing or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;anticipated interest rate risks and not for speculative purposes; and
(f) Indebtedness arising from agreements Guaranty Obligations in respect of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) Credit Party to the extent such net cash proceeds Indebtedness is permitted to exist 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 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and be incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the8.1.
Appears in 2 contracts
Sources: Revolving Credit Loan and Security Agreement (Hersha Hospitality Trust), Revolving Credit Loan and Security Agreement (Hersha Hospitality Trust)
Limitation on Indebtedness. Holdings will The Company shall not, and will shall not permit any Restricted Subsidiary to of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise otherwise, with respect to (collectively, “"incur” and collectively, an “incurrence”") with respect to any Indebtedness (including Acquired Indebtedness) and Holdings will not issue secured by any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that HoldingsCollateral. Notwithstanding the foregoing, the Borrowers Company and their Restricted its Subsidiaries may incur Indebtedness the following (including Acquired Indebtedness) or issue shares each of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would which shall be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:given independent effect):
(a) Indebtedness arising of the Company under the Credit DocumentsNotes and this Indenture;
(b) Permitted Working Capital Indebtedness represented by of the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000Company and its Subsidiaries;
(c) (i) Existing Indebtedness (including any unused commitment) outstanding on such Indebtedness contemplated under the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)Plan of Reorganization;
(d) Capital Expenditure Indebtedness, Capital Lease Obligations and purchase money Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock Company and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)its Subsidiaries;
(e) Indebtedness of the Company representing guarantees of Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter one of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters its Subsidiaries pursuant to, and in compliance with, another provision of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurancethis covenant;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with under the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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 acquisitionTerm Loan Agreement;
(g) any Permitted Refinancing Indebtedness representing a replacement, renewal, refinancing or extension of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by under this clausecovenant;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted SubsidiaryHedging Obligations; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;and
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided Indebtedness under the Series A Notes and the Series A Indenture. In the event that any subsequent issuance or transfer the incurrence of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) Holdings would be permitted hereunder, the Company may designate (in the form of an officer's certificate delivered to incur at least $1.00 the Trustee) the particular provision of additional Indebtedness this Indenture pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries which it is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if incurring such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 2 contracts
Sources: Indenture (Wheeling Pittsburgh Steel Corp /De), Indenture (Wheeling Pittsburgh Corp /De/)
Limitation on Indebtedness. Holdings will The Borrower shall not, and will shall not permit any Restricted Subsidiary to to, create, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept for:
(a) Indebtedness arising created hereunder and under the Credit other Loan Documents;
(b) Indebtedness represented (i) evidenced by the Unsecured Asset Sale Bridge (including any guarantee thereof) performance bonds issued in the ordinary course of business or reimbursement obligations in respect thereof in an aggregate amount at any time not to exceed €500,000,000exceeding $100,000 or (ii) for bank overdrafts incurred in the ordinary course of business that are promptly repaid;
(c) (i) trade credit incurred to acquire goods, supplies, services and incurred in the ordinary course of business; provided that any such Indebtedness (including any unused commitment) outstanding which is more than 90 days past due does not exceed $500,000 in the aggregate, is being contested by the Loan Parties in good faith by appropriate proceedings, and that adequate reserves with respect thereto have been established on the Closing Date listed on Schedule 10.1 books of the Loan Parties to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed extent required by a Credit Party to another Credit Party)GAAP;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall principal amount not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)exceeding $1,000,000 outstanding at anytime;
(e) Indebtedness not to exceed an aggregate amount of $1,000,000 at any time outstanding secured by any purchase money Lien incurred in connection with the acquisition by Holdings the Borrower or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insuranceequipment;
(f) Indebtedness owing by any wholly-owned Domestic Subsidiary to the Borrower or any other wholly-owned Domestic Subsidiary, and Indebtedness owing by the Borrower to any wholly-owned Domestic Subsidiary; provided that such inter-company Indebtedness is evidenced by a note which has been collaterally assigned to the Agent as security for the Obligations;
(g) Indebtedness incurred by the Borrower or any Subsidiary arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout price or similar obligationsobligations which are in amounts, in each caseand on terms, which are commercially reasonable, and are incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, other than guarantees of Indebtedness incurred by any Person acquiring all Permitted Acquisition or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not Asset Disposition permitted by this clausehereunder;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such unsecured Indebtedness not permitted by referred to in any other clause of this clause;Section 6.2 in an aggregate principal amount not exceeding $500,000 at any time; and
(i) shares Indebtedness in an amount not exceeding $3,000,000 incurred by the Borrower to one or more of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insuranceits insurance companies, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, incurred in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any finance payment of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender insurance premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 2 contracts
Sources: Credit Agreement (Physicians Formula Holdings, Inc.), Credit Agreement (Physicians Formula Holdings, Inc.)
Limitation on Indebtedness. Holdings will The Borrower shall not, and will shall not permit any Restricted Subsidiary to of its Subsidiaries to, create, incur, issue, assume, guarantee suffer to exist, or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) remain directly or indirectly liable with respect to to, any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising under the Credit Documentsincurred pursuant to this Agreement;
(b) so long as no Event of Default has occurred and is continuing at the time of the incurrence thereof or after giving effect thereto, Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) consisting of Contingent Obligations in the aggregate amount not to exceed €500,000,000respect of obligations of other Persons;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed identified on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)7.04;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock so long as no Event of Default has occurred and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) continuing at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings the incurrence thereof or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) after giving effect thereto, Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), business in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness connection with respect to reimbursement or indemnification type Capital Leases and purchase money Indebtedness.
(e) obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insuranceunder Swap Contracts entered into for hedging purposes;
(f) Indebtedness arising of the Borrower and its Subsidiaries having a maturity of 92 days or less representing borrowings from agreements of Holdings a bank or banks with which the Borrower or such Subsidiary has a Restricted depository relationship, which borrowings shall be fully secured by Cash Equivalents purchased by the Borrower or such Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion proceeds of such business, assets or a Subsidiary for the purpose of financing such acquisitionborrowings;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, incurred in the ordinary course of business or consistent in connection with past practicerelocation service transactions and secured by properties which are the subject to such transactions;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings Indebtedness incurred by the Borrower or any Restricted a Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make fund a Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) Acquisition and (ii) Indebtedness, Disqualified Stock or preferred stock Indebtedness of Holdings or any Restricted a Person that becomes a Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferenceafter the Amended Facility Effective Date pursuant to a Permitted Acquisition, which when aggregated with Indebtedness existed prior to such Acquisition and was not created in contemplation thereof;
(i) Indebtedness under the principal amount Public Debentures;
(j) so long as no Event of Default has occurred and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) is continuing at the time of incurrence (it being understood that any Indebtednessthereof or after giving effect thereto, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes unsecured Indebtedness of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii))Borrower;
(mk) the incurrence or issuance by Holdings or any Restricted Subsidiary so long as no Event of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 Default has occurred and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) continuing at the time of incurrence thereof, other secured or unsecured Indebtedness of the Borrower and its Subsidiaries, provided the aggregate principal amount of such Indebtedness (excluding Indebtedness of Strategic Investment Subsidiaries and their respective Subsidiaries permitted under Section 7.04(o)) shall not exceed at the time of the incurrence of any one time outstanding, or thereof 10% of Net Worth as of the end of the fiscal quarter immediately preceding any such incurrence;
(yl) Persons that are acquired by Holdings or obligations consisting of guarantees of any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted of Indebtedness of insurance agents of an Insurance Subsidiary in accordance with an aggregate amount not to exceed at the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to time of the incurrence of any thereof 3% of Net Worth as of the end of the fiscal quarter immediately preceding such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theincurrence;
Appears in 2 contracts
Sources: Credit Agreement (Fidelity National Financial, Inc.), Credit Agreement (Fidelity National Financial, Inc.)
Limitation on Indebtedness. Holdings (a) Neither Borrower nor any of its subsidiaries will not, and will not permit any Restricted Subsidiary to create, incur, issueassume or permit to exist, assumedirectly or indirectly, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on except the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is following:
(i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising created under the Credit Loan Documents;
(bii) Indebtedness represented by created under the Unsecured Asset Sale Bridge (including any guarantee Indenture, or Refinancing Indebtedness in respect thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with at any time outstanding not to exceed the difference of (A) $320,000,000 less (B) 25% of all prepayments made of the principal amount of all thereof (other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the than prepayments from proceeds of such Refinancing Indebtedness) (the “Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(aNote Facility”);
(eiii) Indebtedness set forth on Schedule 6.01, but not any extensions, renewals or replacements of any such Indebtedness;
(iv) Guarantees incurred by Holdings in compliance with Section 6.04(f).
(v) Indebtedness of the Borrower or any Restricted Subsidiary of its subsidiaries incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and Synthetic Lease Obligations, and extensions, renewals or replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided, that (including letter A) such Indebtedness is incurred prior to or within 180 days after such acquisition or the completion of credit obligations consistent such construction or improvement and (B) the aggregate principal amount of Indebtedness permitted by this clause (v) shall not exceed $5,000,000 at any time outstanding;
(vi) Indebtedness of any person that becomes a subsidiary of the Borrower (or of any person not previously a subsidiary of the Borrower that is merged or consolidated with past practice constituting reimbursement obligations or into a subsidiary of the Borrower in a Permitted Acquisition) after the date hereof, or Indebtedness of any person that is assumed by any such subsidiary in connection with an Acquisition of assets by such subsidiary in a Permitted Acquisition; provided that (i) such Indebtedness exists at the time such person becomes a subsidiary of the Borrower (or is so merged or consolidated) or such assets are acquired and is not created in contemplation of or in connection with such person becoming a subsidiary (or such merger or consolidation) or such assets being acquired, (ii) the aggregate principal amount of Indebtedness permitted by this clause (vi)(e) shall not exceed $15,000,000 at any time outstanding and (iii) neither the Borrower nor any of its subsidiaries (other than such person or the subsidiary with which such person is merged or consolidated or that so assumes such person’s Indebtedness) shall Guarantee or otherwise become liable for the payment of such Indebtedness;
(vii) Indebtedness owed in respect of any overdrafts and related liabilities arising from treasury, depository and cash management services or in connection with any automated clearing-house transfers of funds;
(viii) Indebtedness under performance, surety, statutory, insurance, appeal or similar bonds or with respect to letters of credit issued workers’ compensation claims, in each case incurred in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(fix) any Crack Spread Hedging Support LC and reimbursement obligations incurred in connection therewith;
(x) Indebtedness arising from agreements incurred under Hedging Agreements permitted pursuant to Section 6.07;
(xi) any other unsecured Indebtedness of Holdings or a Restricted Subsidiary providing for indemnification, adjustment the Borrower and/or its subsidiaries; and
(xii) indebtedness secured by liens permitted under Section 6.02(h).
(b) For purposes of purchase price, earnout or similar obligations, determining compliance with Section 6.01(a) in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, other than guarantees event that an item of Indebtedness incurred by any Person acquiring all (or any portion thereof) meets the criteria of more than one of the types of Indebtedness described herein, the Borrower, in its sole discretion, shall classify such business, assets or a Subsidiary for the purpose item of financing such acquisition;
Indebtedness (g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect portion thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant Incurrence and shall only be required to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes include the amount and type of this clause (l)(ii) but shall be deemed incurred for the purposes such Indebtedness in one of the first paragraph of this Section 10.1 from above clauses and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) Borrower shall be either entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described herein, including under paragraph (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, thea).
Appears in 2 contracts
Sources: Credit Agreement (Alon USA Energy, Inc.), Credit Agreement (Alon Refining Krotz Springs, Inc.)
Limitation on Indebtedness. Holdings The Issuer will not, and will not permit any of its Restricted Subsidiary to subsidiaries to, create, incur, issueassume or suffer to exist any Indebtedness, assume, guarantee except:
(a) Indebtedness evidenced by the Senior Notes or otherwise become liablearising under this Indenture or the Collateral Documents;
(b) Indebtedness of the Issuer and its Restricted Subsidiaries outstanding on the Issue Date and identified on Schedule 3.13 hereto;
(c) Indebtedness incurred by the Issuer or any Restricted Subsidiary for the purpose of financing all or any part of the purchase price of assets acquired in the ordinary course of business ("Purchase Money Indebtedness") and/or in respect of Capital Lease Obligations not in excess of $15,000,000 in any fiscal year and not prohibited under Section 3.15;
(d) Indebtedness of the Issuer to any Wholly Owned Restricted Subsidiary or of any Wholly Owned Restricted Subsidiary to any other Wholly owned Restricted Subsidiary or to the Issuer;
(e) obligations under standby letters of credit incurred by the Issuer or any Restricted Subsidiary in the ordinary course of business; provided that the aggregate undrawn stated amount of all such letters of credit, contingently when added to the aggregate amount of all unreimbursed drawings in respect thereof, shall at no time exceed $5,000,000;
(f) Indebtedness incurred by the Issuer or otherwise any Guarantor in connection with a purchase of the Senior Notes pursuant to a Change of Control offer; provided that the aggregate principal amount of such Indebtedness does not exceed the aggregate unpaid principal amount of the Senior Notes thereby purchased (collectivelyplus the amount of reasonable fees and expenses, “incur” including underwriting discounts and collectivelycommissions, an “incurrence”incurred in connection with obtaining such Indebtedness), and such Indebtedness requires no repayment of the principal thereof prior to the final maturity of the Senior Notes;
(g) Indebtedness in respect of interest rate hedging arrangements with respect to up to one half of the original principal amount of the Senior Notes, provided that any such hedging arrangements are entered into with counterparties whose senior unsecured debt securities are rated investment grade by at least two nationally recognized statistical rating organizations;
(h) Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit incurred by the Issuer or any Restricted Subsidiary in exchange for or to issue repay, prepay, repurchase, redeem, defease, retire or refinance ("refinance") any shares Indebtedness of Disqualified Stock orthe Issuer or such Restricted Subsidiary, in as the case of Restricted Subsidiaries that are not Guarantorsmay be, preferred stock; permitted by clauses (a) through (g) above or any successor or replacement Indebtedness, provided that Holdings, (i) the Borrowers principal amount of the Indebtedness so incurred shall not exceed the unpaid principal amount of the Indebtedness so exchanged or refinanced and their Restricted Subsidiaries may incur (ii) the Indebtedness so incurred (including Acquired IndebtednessA) does not mature prior to the Stated Maturity of the Indebtedness so exchanged or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stockrefinanced, (1B) if such Indebtedness, Disqualified Stock has an Average Life equal to or shares greater than the remaining Average Life of preferred stock is secured by a Lien on the Collateral on a pari passu basis with Indebtedness so exchanged or refinanced and (C) does not have an effective carrying cost greater than the Liens on carrying cost of the Collateral securing Indebtedness so exchanged or refinanced;
(i) additional Indebtedness of the Obligations, issuer in an aggregate principal amount not to exceed $25,000,000 at any time outstanding; and
(j) additional Indebtedness of the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries issuer or any Guarantor so long as (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), i) after giving effect to the incurrence of such Indebtedness and the use application of the proceeds thereoftherefrom, on a the Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares Interest Coverage Ratio for the most recent four-quarter period in respect of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either which financial statements are available exceeds (A) the Consolidated Secured Debt 2.25 to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries 1 (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the ObligationsIndebtedness incurred through August 1, 1994), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings 2.5 to 1 (for Indebtedness incurred on or after August 2, 1994 and the Restricted Subsidiariesprior to August 1, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x1995) or (iiC) clause 2.75 to 1 (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtednesson or after August 2, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof1995) and (ii) Indebtedness, Disqualified Stock or preferred stock such additional Indebtedness requires no repayment of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) thereof prior to or at its respective maturity; provided, 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 remaining weighted average life to final maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theNotes.
Appears in 1 contract
Sources: Indenture (Triarc Companies Inc)
Limitation on Indebtedness. Holdings will (a) The Company shall not, and will shall not permit any Restricted Subsidiary to createof its Subsidiaries to, incurdirectly or indirectly, issue, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to Incur any Indebtedness (including Acquired Indebtedness) unless (a) no Event of Default is continuing and Holdings will not issue any shares (b) the Debt to Capital Ratio of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares the Company as of Disqualified Stock orthe balance sheet date immediately preceding the date on which such additional Indebtedness is incurred would have been no greater than 35%, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness determined on a pro forma basis (including Acquired Indebtednessa pro forma application of the net proceeds therefrom) or issue shares of Disqualified Stockas if the additional Indebtedness and all other Indebtedness incurred since the immediately preceding balance sheet date had been incurred, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect except to the incurrence of extent such Indebtedness is used to prepay other Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes therefrom applied as of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documents;day.
(b) Indebtedness represented by The provisions of Section 3.3(a) shall not apply to the Unsecured Asset Sale Bridge (including any guarantee thereof) in Incurrence of the aggregate amount not to exceed €500,000,000;
(c) following Indebtedness: (i) Indebtedness of the Company evidenced by the Notes, and any exchange notes issued in exchange for such Notes pursuant to the Registration Rights Agreement; (including ii) any unused commitment) Indebtedness outstanding on the Closing Issue Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany any Refinancing Indebtedness (including Incurred in respect of such Indebtedness, and any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment Incurred that is used or useful to redeem the Notes in a Similar Business, whether through accordance with the direct purchase of assets or the Capital Stock of any Person owning such assets and terms hereof; (iii) Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on honoring by a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability bank or other employee benefits or propertyfinancial institution of a check, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout draft or similar obligationsinstrument, in each caseincluding, incurred or assumed in connection with the acquisition or disposition of any businessbut not limited to, assets or a Subsidiary or other Personelectronic transfers, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, wire transfers and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, commercial card payments drawn against insufficient funds in the ordinary course of business (except in the form of committed or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock uncommitted lines of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(iicredit), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at 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 extinguished within 10 Business Days of Incurrence; (iv) Indebtedness owed to banks and other financial institutions Incurred in the remaining weighted average life to maturity ordinary course of business of the Indebtedness, Disqualified Stock Company and its Subsidiaries with such banks or preferred stock being refinanced, financial institutions that arise in connection with ordinary banking arrangements to provide treasury services or to manage cash balances of the Company and its Subsidiaries; (2v) Indebtedness owed by the Company to any Subsidiary or owed by any Subsidiary to the extent such Refinancing Indebtedness refinances Company or another Subsidiary; (ivi) Indebtedness of the Company or any Subsidiary in a total maximum not to exceed $10,000,000 outstanding at any time, provided that is unsecured or secured by a Lien ranking junior to on the Liens securing the Obligations, date any such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectivelyincurred, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisitionthereto on a pro forma basis, merger, consolidation no Default has occurred and is continuing (or designation described in this clause (nwould result therefrom), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) Holdings would be permitted to incur at least $1.00 of additional Indebtedness pursuant including pro forma compliance with any financial covenant ratios applicable to the Fixed Charge Coverage Ratio test set forth in the first paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theNotes; 36
Appears in 1 contract
Sources: Indenture (FedNat Holding Co)
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising in respect of the loans, and other obligations of the Guarantors under the Corporate Credit DocumentsAgreement and the other Loan Documents as defined in the Corporate Credit Agreement;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including of HCC to any guarantee thereof) in the aggregate amount not of its Subsidiaries and of any such Subsidiary which is a Guarantor to exceed €500,000,000HCC or any other Subsidiary of HCC;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Initial Closing Date and listed on on, Schedule 10.1 to the Disclosure Letter 11.2 and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)all extensions, renewals, replacements, refinancings and modifications thereof permitted hereunder;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or and any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, its Subsidiaries in an aggregate principal amount which, when aggregated with not to exceed $10,000,000 at any time outstanding which is recourse only to the principal amount assets of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings HCC or any Restricted Subsidiary pursuant to this clause (d) in connection Subsidiaries acquired or financed with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Indebtedness;
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claimsFinancing Leases provided that, deferred compensationafter giving effect thereto, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurancesubsection 11.7 is not contravened;
(f) Indebtedness arising from agreements in respect of Holdings or a Restricted Subsidiary providing for indemnificationSubordinated Debt, adjustment the terms and conditions of purchase pricewhich have been approved in writing by the Required Lenders and Investors and all extensions, earnout or similar obligationsrenewals, in each casereplacements, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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 acquisitionrefinancings and modifications thereof permitted hereunder;
(g) Indebtedness of Holdings to a Restricted SubsidiaryUnqualified Subsidiaries of Holdings; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clauseis Non-Recourse Indebtedness;
(h) Indebtedness of a Restricted Person which becomes a Subsidiary owing after the date hereof in an aggregate principal amount not exceeding as to Holdings or another Restricted Subsidiary; and its Subsidiaries $10,000,000 at any time outstanding, provided that if (i) such indebtedness existed at the Borrowers or time such Person became a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is and was not the Borrowers or a Guarantor, such Indebtedness is subordinated created in right of payment anticipation thereof and (ii) immediately after giving effect to the Guarantee acquisition of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Person by Holdings or another Restricted Subsidiary) any of its Subsidiaries no Default or Event of Default shall have occurred and be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausecontinuing;
(i) shares Indebtedness in respect of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted SubsidiaryEquipment Lease Tranche A Loans; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;and
(j) Hedging Obligations Indebtedness not contemplated by clauses (excluding Hedging Obligations entered into for speculative purposes);
(ka)-(i) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, above not exceeding $5,000,000 in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 1 contract
Sources: Guarantee (Hanover Compression Inc)
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising under in the Credit Documentsform of the Loans and the other Loan Obligations;
(b) Indebtedness represented under the Chemical Credit Agreement and all extensions and modifications thereof permitted by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000this Agreement;
(c) Indebtedness in the form of (i) Indebtedness the Hanover Land Financing and any extensions and modifications thereof permitted by this Agreement (and any rearrangements and refinancings thereof which would be permitted under this Agreement, including any unused commitmentSection 5.11(b), if the same were made as an extension or modification thereof by the same lender) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date date of this Agreement and listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)II and all extensions and modifications thereof permitted under this Agreement;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance in the purchase, lease, construction, installation, maintenance, replacement or improvement form of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and long-term Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and Borrower for borrowed money incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds public offering or private placement of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);debt securities and all extensions and modifications thereof permitted under this Agreement
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary of the Borrower and its Subsidiaries (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued i) in the ordinary course form of business), Financing Leases of assets described in respect Section 5.3(e)(i) and all extensions and modifications thereof permitted under this Agreement provided that the terms and conditions of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other such Indebtedness are less restrictive than this Agreement and are otherwise reasonably satisfactory to the Agent and the aggregate outstanding principal amount of such Indebtedness does not exceed $5,000,000 and (ii) in the form of Financing Leases and purchase money Indebtedness incurred in connection with respect the financing of assets described in Section 5.3(e)(ii) and all extensions and modifications thereof permitted under this Agreement provided that the terms and conditions of such Indebtedness are less restrictive than this Agreement and are otherwise reasonably satisfactory to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurancethe Agent and the aggregate outstanding principal amount of such Indebtedness does not exceed $1,000,000;
(f) Indebtedness arising from agreements of Holdings owed by Persons acquired by the Borrower or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed its Subsidiaries in connection with Acquisitions made by the acquisition Borrower or disposition of any business, its Subsidiaries and assumed by the Borrower or its Subsidiaries in connection with such Acquisitions and Indebtedness secured by assets acquired by the Borrower or a Subsidiary or other Person, other than guarantees its Subsidiaries in connection with such Acquisitions provided that with respect to each such item of Indebtedness incurred (i) at the time of the Acquisition by any Person acquiring the Borrower or its Subsidiaries and given the information, time, and standards set forth for the making of a Loan with the same purpose, terms, and conditions under this Agreement, the Agent has determined after consultation with the Borrower that the Borrower could satisfy all or any portion requirements and conditions precedent under this Agreement for the making of such business, assets or a Subsidiary for Loan under this Agreement with the purpose same terms and conditions as such Indebtedness and (ii) the terms and conditions of financing such acquisitionIndebtedness are less restrictive than this Agreement and are otherwise reasonably satisfactory to the Agent;
(g) Indebtedness in the form of Holdings to a Restricted Subsidiary; unsecured Subordinated Debt of the Borrower and all extensions and modifications thereof permitted under this Agreement, provided that any subsequent issuance or transfer with respect to each such item 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 i) prior to another the funding of thereof and given the information, time, and standards set forth for the making of a Loan with the same purpose, terms, and conditions under this Agreement, the Agent has determined after consultation with the Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;that the Borrower could satisfy the
(h) Indebtedness of a Restricted Subsidiary owing any Loan Party to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary Loan Party not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to restricted under this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) Agreement; and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the
Appears in 1 contract
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising of the Parent and any of its Subsidiaries under this Agreement and the Credit other Loan Documents;
(b) Indebtedness represented by of the Unsecured Asset Sale Bridge (including Borrower to any guarantee thereof) in Subsidiary and of any Subsidiary Guarantor to the aggregate amount not to exceed €500,000,000Borrower or any other Subsidiary;
(c) Indebtedness of the Borrower and any of its Subsidiaries incurred to finance any acquisition of fixed or capital assets (i) whether pursuant to a loan, a Financing Lease or otherwise); provided that, the principal amount of such Indebtedness (including any unused commitment) does not exceed the aggregate purchase price of such property at the time it was acquired, and renewals, extensions and refinancings of such Indebtedness, provided that the amount of such Indebtedness outstanding on at the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)time of such renewal, extension or refinancing is not increased;
(d) Indebtedness (including Capitalized Lease Obligations)outstanding on the date hereof and listed on Schedule 7.2 and renewals, Disqualified Stock extensions and preferred stock incurred by Holdings or any Restricted Subsidiaryrefinancings thereof; provided that, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then such Indebtedness outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings such renewal, extension or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall refinancing is not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)increased;
(e) Indebtedness of a Person that becomes a Subsidiary of the Borrower after the date hereof, Indebtedness secured by property or assets acquired by any Subsidiary after the date hereof, Indebtedness assumed in connection with acquisitions of assets permitted by Section 7.10(g) and any Indebtedness incurred to refinance any such Indebtedness previously referred to in this Section 7.2(e); provided that, (i) such Indebtedness existed at the time such Person became a Subsidiary or such property or assets were acquired, as the case may be, and was not created in anticipation thereof or such Indebtedness is created to refinance any such existing Indebtedness and does not increase the outstanding principal amount thereof, (ii) any such refinanced Indebtedness is payable with interest and fees at rates consistent with those prevailing in the relevant market at the time of issuance (as determined in good faith by the Borrower), (iii) the other terms and conditions of any such refinanced Indebtedness referred to in this paragraph, taken as a whole, including, without limitation, the covenants, default provisions and representations and warranties, are not more restrictive than the terms and conditions of this Agreement (as determined in good faith by the Borrower); provided that, nothing in this Section 7.2(e) shall be deemed to prevent such Indebtedness from being secured by Liens permitted by Section 7.3(g), and (iv) immediately after giving effect to the acquisition of such Person, property or assets or such refinancing, as the case may be, no Default or Event of Default shall have occurred and be continuing;
(f) Indebtedness of the Parent, the Borrower or any Subsidiary under any Interest Rate Protection Agreement, Commodity Price Protection Agreement or Exchange Rate Protection Agreement permitted pursuant to Section 7.10;
(g) Indebtedness of the Parent to the Borrower or any of its Subsidiaries incurred to purchase, repurchase, redeem or retire the Parent’s Capital Stock, which Indebtedness is incurred when no Default or Event of Default has occurred and is continuing or would result therefrom and such purchase, repurchase, redemption or retirement is made in compliance with Section 7.8(h);
(h) so long as no Default or Event of Default shall have occurred and be continuing, Indebtedness of the Parent to the Borrower or any of its Subsidiaries incurred to cover reasonable and necessary expenses incurred by Holdings the Parent in connection with registration, public offerings and exchange listing of securities;
(i) Indebtedness of the Parent to the Borrower and its Subsidiaries in an amount sufficient to pay tax liabilities of the Parent which are paid in cash by the Parent to any taxing authority and which are attributable to income, business, properties or activities of, or distribution of earnings by, the Parent or its Subsidiaries; provided that, the Parent shall repay such Indebtedness upon receipt of any refunds of such tax payments in an amount equal to such refunds;
(j) Indebtedness of the Parent to the Borrower and its Subsidiaries (in addition to Indebtedness otherwise permitted by this Section 7.2) incurred to pay expenses in the ordinary course of business;
(k) Indebtedness of the Parent to the Borrower and its Subsidiaries incurred to pay premiums to insurance companies for directors’ and officers’ insurance with respect to the Parent;
(l) Indebtedness of the Parent to the Borrower and its Subsidiaries incurred to pay for the printing and distribution of financial reports of the Parent, proxy solicitations and other communications with shareholders of the Parent and for filings with the Securities and Exchange Commission and costs directly related to the annual meeting of shareholders of the Parent;
(m) Indebtedness of the Parent to the Borrower and its Subsidiaries incurred to pay directors’ fees and expenses to directors of the Parent;
(n) Indebtedness of the Parent to the Borrower and its Subsidiaries incurred to pay fees owed by the Parent to its transfer agent;
(o) Indebtedness of the Parent to the Borrower and its Subsidiaries, the proceeds of which are used to pay fees to the Parent’s independent auditors, tax advisors and outside attorneys in the ordinary course of business;
(p) Indebtedness incurred to exercise purchase options under leases (other than Financing Leases and Short Term Leases) for tractors, trailers and related equipment which leases are assumed or acquired subsequent to the Closing Date in connection with Permitted Acquisitions; provided that, (i) such Indebtedness is payable with interest and fees at rates consistent with those prevailing in the relevant market at the time of issuance (as determined in good faith by the Borrower), (ii) the other terms and conditions of such Indebtedness, taken as a whole, including, without limitation, the covenants, default provisions and representations and warranties, are not more restrictive than the terms and conditions of this Agreement (as determined in good faith by the Borrower); provided that, nothing in this clause shall be deemed to prevent such Indebtedness from being secured by Liens permitted by Section 7.3(h), and (iii) immediately after giving effect to the exercise of such purchase option, no Default or Event of Default shall have occurred and be continuing;
(q) Account Receivable Indebtedness of the Parent or any Restricted of its Subsidiaries not exceeding $75,000,000 in an aggregate principal amount at any one time outstanding;
(r) Indebtedness of any Receivables SPV arising out of any investment in such Receivables SPV made by the Parent, the Borrower or any Subsidiary of the Borrower in accordance with Section 7.10(q);
(including letter s) Indebtedness of credit obligations consistent any Subsidiary that is not a Loan Party to any Loan Party incurred in connection with past practice constituting reimbursement obligations a loan, advance or investment permitted by Section 7.10(r);
(t) Indebtedness of the Insurance Subsidiary with respect to letters of credit issued for its account and secured by Liens as permitted in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposesSection 7.3(k);
(ku) obligations Guarantee Obligations constituting Indebtedness that are otherwise permitted in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practiceSection 7.4;
(iv) Indebtedness in the form of lease liabilities under sale and leaseback transactions permitted by Section 7.13; and
(w) Outstanding Permitted Line of Credit Indebtedness, Disqualified Stock Permitted Specified Additional Debt, and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference other unsecured (together with any Refinancing or, to the extent permitted by Section 7.3(m), secured) Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings Parent or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have Subsidiaries not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified described in clauses (a) and through (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (cv) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness)that, Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in Indebtedness pursuant to this clause (nw), either: the Borrower shall be in compliance, on a pro forma basis, with the Leverage Ratio specified in Section 7.1(a) (i) calculated as at the end of the most recently ended fiscal quarter of the Parent for which financial statements have been delivered pursuant to Section 6.1 as if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) Holdings would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in had been incurred on the first paragraph day of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to four fiscal quarter period ended with such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, themost recently ended fiscal quarter).
Appears in 1 contract
Limitation on Indebtedness. Holdings will notNot, and will not permit any Restricted Subsidiary to (other than Unrestricted Subsidiaries) to, create, incur, issueassume or suffer to exist any Indebtedness, assume, guarantee or otherwise become liable, contingently or otherwise except:
(collectively, a) obligations under this Agreement and the other Loan Documents;
(b) Indebtedness of Subsidiaries to the Company;
(c) unsecured Indebtedness of the Company to Subsidiaries (other than Unrestricted Subsidiaries);
(d) Subordinated Debt;
(e) Hedging Obligations incurred for bona fide hedging purposes and not for speculation;
(f) Indebtedness existing on the date hereof and described on Schedule 9.7 (including amounts available under commitments related thereto but not yet drawn upon) (the “incur” and collectively, an “incurrenceExisting Indebtedness”) and any Indebtedness extending the maturity of, or refunding or refinancing, such Existing Indebtedness, provided that (i) the principal amount of such Existing Indebtedness shall not be increased above the lesser of (x) the amount thereof immediately prior to such extension, refunding or refinancing (including amounts available under commitments related thereto but not yet drawn upon) and (y) the amount set forth across from such Indebtedness on Schedule 9.7 under the column “Current Balance”, and (ii) the direct or contingent obligors therefor shall not be changed as a result of or in connection with such extension, refunding or refinancing;
(g) Indebtedness secured by Liens permitted by clause (vi) of the definition of Permitted Liens, provided that the aggregate amount of all such Indebtedness at any time outstanding shall not exceed $5,000,000; and any Indebtedness extending the maturity of, or refunding or refinancing, such Indebtedness, provided that the principal amount of such Indebtedness shall not be increased above the amount thereof immediately prior to such extension, refunding or refinancing (including amounts available under commitments related thereto but not yet drawn upon), and the direct or contingent obligors therefor shall not be changed as a result of or in connection with such extension, refunding or refinancing;
(h) unsecured Indebtedness of the Borrower (which may be Guaranteed by the Company provided such Guarantee is unsecured), in addition to the Indebtedness listed above, in an aggregate principal amount not at any time exceeding $200,000,000; provided that (i) the amount of each credit facility in respect to any of such Indebtedness (including Acquired Indebtednessamounts available under commitments related thereto but not yet drawn upon) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stockshall be no less than $5,000,000, (1ii) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock no Event of Default or shares Unmatured Event of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either Default shall exist and (Aiii) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness is used to finance the working capital needs of the Company and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted its Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is ; and
(i) unsecured or (ii) is secured by assets that do not become Collateralother Indebtedness, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect in addition to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiaryabove, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) exceeding $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the5,000,000.
Appears in 1 contract
Sources: Credit Agreement (Carmax Inc)
Limitation on Indebtedness. Holdings The Company will not, and will cause the Restricted Subsidiaries not permit any Restricted Subsidiary to to, directly or indirectly, create, incur, issue, assume, guarantee guarantee, suffer to exist or otherwise become directly or indirectly liable, contingently or otherwise with respect to, any Secured Indebtedness, except for the following, without duplication:
(A) Secured Indebtedness in respect of the Obligations;
(B) Secured Indebtedness existing as of the Issue Date (other than the Indebtedness described in clauses (A), (C) and (D));
(C) (i) Secured Indebtedness incurred pursuant to the Amended [2029] First Lien Notes Indenture; and (ii) Secured Indebtedness incurred pursuant to the New [2029] First Lien Notes Indenture, in each case as in effect on the Issue Date;
(D) Secured Indebtedness incurred pursuant to repayment obligations under the Total Solarization Agreement and any Secured Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to refinance or refund, replace, exchange, renew, repay, redeem, defease, discharge or extend, in full or in part, such repayment obligations (plus premiums, accrued interest, fees and expenses), in an amount not to exceed the amount so refinanced or refunded;
(E) Secured Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to refinance or refund, replace, exchange, renew, repay, redeem, defease, discharge or extend (collectively, “incurrefinance,” “refinances,” “refinancing” and collectively“refinanced” shall have a correlative meaning) (“Permitted Refinancing Secured Indebtedness”), an “incurrence”) with respect to any then outstanding Secured Indebtedness (including Acquired Indebtedness) and Holdings will not issue or Indebtedness repaid substantially concurrently with, but in any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock orcase before, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2Permitted Refinancing Secured Indebtedness) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligationsincurred under Sections 3.12(A), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured3.12(B), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness3.12(C), Disqualified Stock 3.12(F), 3.12(G), 3.12(H), 3.12(I) and preferred stock that may be incurred pursuant to the foregoing together with 3.12(I) and any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) refinancing thereof in the aggregate an amount not to exceed €500,000,000;
the amount so refinanced or refunded (c) plus reasonable premiums, accrued interest, fees and expenses); provided that (i) Secured Indebtedness the proceeds of which are used to refinance or refund the Notes or Secured Indebtedness that is pari passu with, or subordinated in right of payment to, the Notes shall only be permitted under this Section 3.12(E) if (y) in case the Notes are refinanced in part or the Secured Indebtedness to be refinanced is pari passu with the Notes, such new Secured Indebtedness, by its terms or by the terms of any agreement or instrument pursuant to which such new Secured Indebtedness is outstanding, is expressly made pari passu with, or subordinate in right of payment to, the remaining Notes, if any, as applicable, or (z) in case the Secured Indebtedness to be refinanced is subordinated in right of payment to the Notes, such new Secured Indebtedness, by its terms or by the terms of any agreement or instrument pursuant to which such new Secured Indebtedness is issued or remains outstanding, is expressly made subordinate in right of payment to the Notes at least to the extent and in the same manner that the Secured Indebtedness to be refinanced is subordinated to the Notes, (ii) such new Secured Indebtedness, determined as of the date of incurrence of such new Secured Indebtedness, does not mature prior to the Stated Maturity of the Secured Indebtedness to be refinanced, and the Average Life of such new Secured Indebtedness is at least equal to the remaining Average Life of the Secured Indebtedness to be refinanced, (iii) such new Secured Indebtedness will not have additional obligors or greater (including higher ranking priority) guarantees; and provided, further, that the Liens securing such Secured Indebtedness (including i) do not extend to or cover any unused commitment) outstanding on property or assets of the Closing Date listed on Schedule 10.1 to Company or any Restricted Subsidiary other than the Disclosure Letter property or assets securing the Secured Indebtedness being refinanced, and (ii) intercompany do not rank higher in priority than the Liens on such property or assets securing the Secured Indebtedness (including any unused commitment) outstanding being refinanced, whether by priority of such Lien or the priority of payment on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)enforcement of such Lien;
(dF) Secured Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings of the Company or any Restricted Subsidiary, Company Indenture Party not to finance exceed US$[50,000,000]; provided that such Secured Indebtedness shall not constitute refinancing Indebtedness;
(G) Secured Indebtedness incurred (i) in connection with the purchaseacquisition, lease, construction, installation, maintenancerepair, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) or (ii) in respect of Sale/Leaseback Transactions of equipment and Indebtedness arising from the conversion property of the obligations of Holdings Company or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with in the principal amount case of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (di) and all Refinancing (ii), at any time outstanding (together with refinancing thereof) not to exceed an amount equal to [25.0]% of PP&E;
(H) Secured Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed by the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings Company or any Restricted Subsidiary with a maturity of one year or less for working capital in an aggregate principal amount at any one time outstanding (together with any refinancings thereof, including any Permitted Refinancing Indebtedness under Section 3.12(E) (which must for such purposes have a maturity of one year or less and be for working capital)) of all Secured Indebtedness incurred under this Section 3.12(H), together with the aggregate principal amount at such time outstanding of any Indebtedness incurred (i) pursuant to this clause the SCB Agreement and (dii) in connection with a Permitted Sale Leaseback shall pursuant to any Receivable Financing (other than Non-recourse Receivable Financing) under Section 3.12(I), not be subject to exceed [15.0]% of Total Revenue (or the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(aDollar Equivalent thereof);
(eI) Secured Indebtedness incurred by Holdings arising in connection with Hedging Agreements entered into in the ordinary course of business (and not for speculative purposes) (a) to hedge or mitigate risks to which the Company or any Restricted Subsidiary of its Subsidiaries has actual or potential exposure (other than those in respect of equity interest of the Company or any of its Subsidiaries), including letter of credit obligations consistent with past practice constituting reimbursement obligations to hedge or mitigate foreign currency and commodity price risks and (b) to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to letters any interest-bearing liability of credit issued the Company or any of its Subsidiaries; provided that the Liens secured such Secured Indebtedness are encumbering customary initial deposits or margin deposits or are otherwise within the general parameters customary in the industry and incurred in the ordinary course of business), ;
(J) Secured Indebtedness of the Company or any Restricted Subsidiary in respect of workers’ compensation claimsReceivable Financing (other than Non-recourse Receivable Financing) in an aggregate principal amount any time outstanding (together with any refinancing thereof, deferred compensationincluding any Permitted Refinancing Indebtedness under Section 3.12(E)) not to exceed $15,000,000; provided that the Liens securing such Secured Indebtedness are on accounts receivables and other assets of the type specified in the definition of “Receivable Financing;”
(K) Secured Indebtedness incurred to finance Capital Expenditures duly approved by the Board of Directors; provided, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other that the Liens securing such Indebtedness shall not be permitted to exist on any portion of the Collateral and such Lien secures only the assets that are the subject of the Indebtedness referred to in this Section 3.12(K);
(L) Secured Indebtedness with respect to reimbursement letters of credit, bank guarantee, or indemnification type similar instruments posted to support (i) pension obligations regarding workers’ compensation claimsthat arise in the ordinary course of business; and (ii) contracts with trade creditors, deferred compensationcontracts (other than in respect of debt for borrowed money), leases, bids, statutory obligations, customs, surety, stay, appeal and performance bonds, performance or surety bonds, and completion guarantees and other obligations of a like nature (including those to secure health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar safety and environmental obligations), in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past industry practice;
(M) Secured Indebtedness owed to (i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed Person providing worker’s compensation to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings Company or any of its Subsidiaries) as determined Subsidiaries incurred in accordance connection with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied Person providing such benefits pursuant to customary reimbursement or indemnification obligations to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) Person and (ii) Indebtedness, Disqualified Stock appeal or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, mergersimilar bonds, or consolidation or bonds with respect to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiaryworker’s compensation claims; provided that the amount of Liens securing such Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may shall be incurred pursuant to in the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph ordinary course of this Section 10.1 or (ii) clause (c) business and exclusive of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA obligations for the most recently ended Test Period payment of borrowed money;
(calculated N) any Junior Lien Indebtedness; and
(O) on a Pro Forma Basis) at and from the time of incurrence at Forward Purchase Closing, any one time outstanding, other Secured Indebtedness that the Company or (y) Persons that are acquired by Holdings or any its Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) Holdings would be permitted to incur at least $1.00 of additional Indebtedness pursuant to any of the Fixed Charge Coverage Ratio test set forth in the first paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Priority Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theDocuments.
Appears in 1 contract
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issueassume or suffer to exist any Indebtedness (including any Indebtedness of any of its Subsidiaries), assumeexcept:
(a) (i) Indebtedness of the Borrowers under this Agreement (including Indebtedness under any Incremental Facilities incurred in compliance with subsection 2.6); and (ii) Indebtedness of the Loan Parties under the Loan Documents;
(b) Indebtedness evidenced by the Existing Notes, guarantee as the same may be amended, restated or otherwise become liablemodified;
(c) Indebtedness of the Company or any Subsidiary Guarantor incurred to refinance, contingently in whole or in part, the Existing Notes and any subsequent refinancings, renewals, extensions or replacements thereof, in each case as the same may be amended, restated or otherwise modified from time to time; provided that (collectivelyi) the amount of such Indebtedness is not increased except by an amount equal to the premium or other amounts paid, and fees and expenses incurred, in connection with such refinancing, refunding, renewal or extension and (ii) such Indebtedness is not secured, directly or indirectly, by any assets of Intermediate Holding or any Subsidiary that is not a Subsidiary Guarantor or guaranteed by Subsidiaries that are not Subsidiary Guarantors;
(d) Indebtedness of the Company or any Subsidiary Guarantor, without limitation as to amount so long as such Indebtedness is incurred at a time when the Company is in Pro Forma Compliance and no Event of Default shall exist or would occur as a result therefrom;
(e) Indebtedness of the Company or any Subsidiary Guarantor secured by the Collateral (for so long as the Obligations are secured thereby and, if the Obligations are unsecured, the Indebtedness permitted by this subsection 8.2(e) shall likewise be required to be unsecured) consisting of (i) Indebtedness of the Company or any Subsidiary Guarantor in an aggregate principal amount not to exceed the sum of (x) an amount equal to the greater of (A) $750,000,000 and (B) 75% of EBITDA for the most recently ended Test Period for which financial statements have been delivered pursuant to subsection 7.1(a) or (b) (the “incur” Incremental Equivalent Fixed Amount Basket”) minus the aggregate amount of all Incremental Facilities and collectivelyIncremental Increases in effect at the time of the incurrence of such Indebtedness (but solely to the extent such Incremental Facilities and/or Incremental Increases were incurred in reliance on the Incremental Fixed Amount Basket) and (y) the maximum amount of Indebtedness which may be incurred at such time without the Consolidated Senior Secured Leverage Ratio (after giving pro forma effect to such incurrence and all other transactions to be consummated in connection therewith) exceeding 3.50 to 1.00, an “incurrence”provided, (A) in the case of Indebtedness incurred pursuant to this clause (i), that (1) no Event of Default shall exist or will occur as a result from the incurrence of such Indebtedness (or if the proceeds of such Indebtedness are being used to finance a Limited Conditionality Acquisition, no Event of Default shall exist on the date of the execution of the definitive purchase agreement, merger agreement or other acquisition agreement governing such Investment or acquisition and no Event of Default under any of subsection 9(a) or 9(f) shall exist or will occur as a result of the incurrence of such Indebtedness), (2) such Indebtedness neither matures nor has a Weighted Average Life that is (X) with respect to any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, prior to the Consolidated First Lien Secured Debt Termination Date with respect to Consolidated EBITDA Ratio of Holdings the Term A-1 Facility or, if later, the latest Termination Date with respect to any Incremental Term Facility outstanding at the time such Indebtedness is incurred and the Restricted Subsidiaries (including for the purposes of such calculation Y) with respect to any Disqualified Stock or shares of preferred stock Indebtedness that is secured by a Lien on a pari passu junior basis with the Liens on the Collateral securing the ObligationsObligations (or, as long as the Obligations are secured by the Collateral under the Loan Documents, with respect to any unsecured Indebtedness), after giving effect prior to the incurrence of date that is 91 days after the Termination Date with respect to the Term A-1 Facility or, if later, the latest Termination Date with respect to any Incremental Term Facility outstanding at the time such Indebtedness and is incurred (provided that (I) at the use option of proceeds thereofthe Company, on a Pro Forma Basis would not exceed 5.00:1.00, this clause (2) if such shall not apply to any Permitted Bridge Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (AII) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of so long as such Indebtedness and is not incurred under the use Incremental Equivalent Fixed Amount Basket, Indebtedness of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 the Company or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that Subsidiary Guarantor may be incurred pursuant with a maturity and/or a Weighted Average Life that is prior to the foregoing together dates set forth above with respect to the Term A-1 Facility or the latest Termination Date with respect to any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are Incremental Term Facility, as applicable, in an aggregate amount not Guarantors shall not to exceed the greater of (x) $550,000,000 400,000,000 and (y) 50.040% of Consolidated EBITDA for the most recently ended Test Period for which financial statements have been delivered pursuant to subsection 7.1(a) or (calculated b), and (III) in determining the latest Termination Date in respect of any Term Facility for purposes of subsection (A)(2) of the proviso immediately above, any Term Facility outstanding with a stated maturity date later than the five year anniversary of the incurrence of such Term Facility shall be disregarded), (3) the covenants, events of default and guarantees of any such Indebtedness, shall not be materially more restrictive to the Company, when taken as a whole, than the terms of the existing Loans, unless (x) the Lenders under the existing Loans also receive the benefit of such more restrictive terms (it being understood to the extent that any covenant is added for the benefit of any such Indebtedness, no consent shall be required from the Administrative Agent or any Lender to the extent that such covenant is also added for the benefit of any corresponding existing Loans), (y) any such provisions apply after the latest Termination Date applicable to outstanding Loans at such time, or (z) such terms shall be reasonably satisfactory to the Administrative Agent and the Company; provided that a certificate of a Responsible Officer delivered to the Administrative Agent in connection with the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such resulting Indebtedness or copies of the principal documentation relating thereto, stating that the Company has determined in good faith that such terms and conditions satisfy the foregoing requirement, shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies the Company within fifteen (15) Business Days that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees) and (4) such Indebtedness does not have mandatory prepayment or redemption features other than (x) amortization permitted by the foregoing clause (2) and (y) customary asset sale, insurance and condemnation proceeds events, change of control offers and events of default no more restrictive than the terms of the existing Loans, except to the extent any such more restrictive provisions apply after the latest Termination Date existing at such time; provided, that, no such Indebtedness shall require prepayments from the Net Cash Proceeds from events triggering prepayments pursuant to subsection 4.2(b) on a Pro Forma Basis) at greater than pro rata basis with any one time outstanding. The foregoing limitations will not apply to:
Term Loans then outstanding that also requires such prepayment; and (a) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereofB) in the aggregate amount not case of all Indebtedness permitted by this subsection 8.2(e), that such secured Indebtedness ranks pari passu with or is junior in right of payment to exceed €500,000,000;
the Indebtedness under this Agreement, is guaranteed only by one or more of the Company and the Guarantors, and is subject to an intercreditor agreement in form and substance reasonably satisfactory to the Administrative Agent (cit being understood and agreed by all present and subsequent Lenders from time to time party hereto that the Administrative Agent is hereby authorized to execute and deliver an intercreditor, collateral agency or similar agreement and security documents and/or amend the existing Security Documents securing the Obligations in connection with the grant of a pari passu or junior Lien to secure such Indebtedness in form and substance reasonably satisfactory to the Administrative Agent (it being understood that the Intercreditor Agreement is reasonably satisfactory in form and substance) and that the execution thereof by the Administrative Agent will bind all holders from time to time of the Obligations and which may provide, among other things, that the proceeds of any Collateral may be distributed pro rata to the Obligations and such other Indebtedness and which may provide that the trustee, administrative agent or collateral agent for such other Indebtedness may independently exercise rights and remedies with respect to the Collateral upon an event of default under such other Indebtedness, subject to sharing, notice and other customary provisions reasonably acceptable to the Administrative Agent); or (ii) any refinancing or replacement of the Indebtedness referenced in clause (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiaryabove, in an aggregate principal amount whichwhole or in part, when aggregated with so long as such refinancing or replacement (x) does not increase the principal amount of all other Indebtedness, Disqualified Stock the Indebtedness being refinanced or replaced except by an amount equal to unpaid accrued interest and preferred stock then outstanding fees and expenses incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 in connection therewith and (y) 50.0% satisfies the requirements of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this sub-clause (dA) in connection with a Permitted Sale Leaseback shall not be subject to of the foregoing limitation so long as the proceeds first proviso following clause (ii) above and, if such refinancing or replacement is secured by any Collateral, sub-clause (B) of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insuranceproviso;
(f) Indebtedness arising from agreements of Holdings the Company to any Guarantor or, to the extent permitted by subsection 8.8(f), (l), (o) or a Restricted (q), any Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition Company and of any businessSubsidiary of the Company to the Company, assets any Guarantor or, to the extent permitted by subsection 8.8(f), (l), (o) or a (q), any other Subsidiary or other Person, 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 acquisitionCompany;
(g) Indebtedness of Holdings the Company and any of its Subsidiaries incurred to finance or refinance the acquisition of fixed or capital assets (whether pursuant to a Restricted Subsidiaryloan, a Financing Lease or otherwise) otherwise permitted pursuant to this Agreement, and any other Financing Leases, in an aggregate principal amount at any one time outstanding in the aggregate as to the Company and its Subsidiaries not exceeding 10% of Consolidated Tangible Assets, provided that such Indebtedness is incurred substantially simultaneously with such acquisition or within six months after such acquisition or in connection with a refinancing thereof (and any refinancing, renewals, extensions or replacements thereof in whole or in part; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence the amount of such Indebtedness is not permitted increased at the time of such refinancing, refunding, renewal or extension except by this clausean amount equal to the premium or other amounts paid, and fees and expenses incurred, in connection with such refinancing, refunding, renewal or extension);
(h) Indebtedness of a Restricted Subsidiary owing the Company and any of its Subsidiaries incurred to Holdings finance or another Restricted Subsidiary; refinance the purchase price of, or Indebtedness of the Company and any of its Subsidiaries assumed in connection with, any acquisition permitted by subsection 8.9, provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, (i) such Indebtedness is subordinated in right of payment to the Guarantee of incurred prior to, substantially simultaneously with or within six months after such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings acquisition or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, that such Refinancing Indebtedness (1) has with a weighted average life to maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligationsrefinancing thereof, (ii) Disqualified Stock such Indebtedness is incurred at a time when the Company is in Pro Forma Compliance (provided that if such acquisition is a Limited Conditionality Acquisition, the satisfaction of the conditions set forth in this clause (ii) shall (to the extent requested by the Company as set forth in the definition of Limited Conditionality Acquisition) be determined as of the date of the execution of the definitive purchase agreement, merger agreement or preferred stock, other acquisition agreement governing such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, Limited Conditionality Acquisition) and (iii) Indebtedness subordinated immediately after giving effect to such acquisition no Event of Default shall have occurred and be continuing (or, in the Obligationscontext of a Limited Conditionality Acquisition, no Event of Default shall exist on the date of the execution of the definitive purchase agreement, merger agreement or other acquisition agreement governing such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced Investment or acquisition and (3no Event of Default under any of subsection 9(a) or 9(b) shall not include Indebtedness, Disqualified Stock exist or preferred stock of will occur as a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock result of the Borrowers incurrence of such Indebtedness) (and any refinancing, renewals, extensions or a Guarantor;
(n) Indebtedness, Disqualified Stock replacements thereof in whole or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiaryin part; provided that the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to the premium or other amounts paid, and fees and expenses incurred, in connection with such refinancing, refunding, renewal or extension);
(i) to the extent that any Indebtedness may be incurred or arise thereunder, Indebtedness of the Company and its Subsidiaries under Interest Rate Protection Agreements and under Permitted Hedging Arrangements;
(j) (i) other Indebtedness outstanding or incurred under facilities in existence on the Effective Date to the extent under $25,000,000 individually and so long as the aggregate amount of Indebtedness under this clause (j)(i) does not exceed $50,000,000, (ii) other Indebtedness outstanding or incurred under facilities in existence on the Effective Date to the extent listed on Schedule 8.2(j), and (iii) any refinancings, refundings, renewals or extensions thereof; provided that, in the case of each of the foregoing clauses (i) through (iii), the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to the premium or other amounts paid, and fees and expenses incurred, in connection with such refinancing, refunding, renewal or extension;
(k) Guarantee Obligations of the Company or any of its Subsidiaries in respect of Indebtedness of the Company or any of its Subsidiaries (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred any Receivables Subsidiary) otherwise permitted hereunder;
(l) Indebtedness of the Company or any of its Subsidiaries pursuant to any Permitted Securitization Transaction;
(m) Indebtedness of Foreign Subsidiaries of the foregoing, together with any outstanding amounts incurred by Restricted Company and Subsidiaries that are not Subsidiary Guarantors under (i) the first paragraph in addition to Indebtedness of this Section 10.1 or (ii) clause (c) such Subsidiaries of the definition of Permitted Other Indebtedness Company permitted by Restricted subsection 8.2(a) and subsection 8.2(j)) in the aggregate principal amount at any one time outstanding as to all such Foreign Subsidiaries and Subsidiaries that are not Guarantors, shall Subsidiary Guarantors not to exceed the greater of (A) $550,000,000 and B) 50.015% of Consolidated EBITDA for Tangible Assets at such time;
(n) Indebtedness of the most recently ended Test Period Company or any of its Subsidiaries in respect of Sale and Leaseback Transactions permitted under subsection 8.11;
(calculated o) Indebtedness of the Company or any of its Subsidiaries incurred to finance insurance premiums in the ordinary course of business;
(p) Indebtedness of any Foreign Subsidiary of the Company fully supported on the date of the incurrence thereof by a Pro Forma BasisForeign Backstop Letter of Credit;
(q) Indebtedness arising from the honoring of a check, draft or similar instrument against insufficient funds; provided that such Indebtedness is extinguished within five Business Days of its incurrence and other Indebtedness incurred pursuant to any Secured Cash Management Agreements;
(r) Indebtedness in respect of Financing Leases which have been funded solely by Investments of the Company and its Subsidiaries permitted by subsection 8.8(m);
(s) [reserved];
(t) [reserved];
(u) Guarantee Obligations of the Company and its Subsidiaries in respect of recourse events in connection with any Permitted Securitization Transaction or any Permitted Receivables Transaction;
(v) Guarantee Obligations in respect of Indebtedness of a Person in connection with a joint venture or similar arrangement, and as to all of such Persons does not at any time (together with any Investments made in accordance with subsection 8.8(l)) exceed an aggregate principal amount $300,000,000 at any time outstanding; and
(w) additional Indebtedness not otherwise permitted by the time preceding clauses of incurrence this subsection 8.2 not exceeding $150,000,000 in aggregate principal amount at any one time outstanding; provided, or (y) Persons in each case, that are acquired by Holdings or any Restricted Guarantee Obligation of any Loan Party in respect of Indebtedness of any Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theth
Appears in 1 contract
Sources: Credit Agreement (Graphic Packaging International, LLC)
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to None of the Group Companies shall create, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue except Indebtedness described in any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply tofollowing clauses:
(a) Indebtedness arising under of the Credit DocumentsBorrower and any Group Company outstanding on the Closing Date and disclosed on Schedule 7.01 (collectively, the “Existing Indebtedness”) and any Permitted Refinancing;
(b) Indebtedness represented by of the Unsecured Asset Sale Bridge (including any guarantee thereof) in Loan Parties under this Agreement and the aggregate amount not to exceed €500,000,000other Loan Documents;
(c) Indebtedness of the Borrower or its Domestic Subsidiaries secured by Liens permitted by clauses (ip), (q) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (iir) intercompany of Section 7.02 and any other Indebtedness (including of a Person whose Equity Interests or assets are acquired in a Permitted Acquisition which is acquired or assumed by the Borrower or a Domestic Subsidiary of the Borrower in such Permitted Acquisition and any unused commitment) outstanding on Permitted Refinancing thereof; provided that such Indebtedness was not incurred in connection with, or in anticipation of, the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany events described in such clauses and such Indebtedness owed by a Credit Party to another Credit Party)does not constitute Indebtedness for borrowed money;
(d) unsecured Subordinated Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings of the Borrower or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment its Domestic Subsidiaries that is used or useful in issued to a Similar Business, whether through the direct purchase seller of assets or the Capital Stock Person acquired in a Permitted Acquisition and any Permitted Refinancing thereof if, immediately prior to and after giving effect thereto, no Event of Default shall exist or result therefrom;
(e) (A) contingent liabilities in respect of any indemnification, adjustment of purchase price, earn-out, non-compete, consulting, deferred compensation and similar obligations of the Borrower and its Subsidiaries incurred in connection with Permitted Acquisitions and (B) Indebtedness incurred by the Borrower or its Subsidiaries in a Permitted Acquisition under agreements providing for earn-outs or the adjustment of the purchase price or similar adjustments;
(f) Indebtedness owed to any Person owning providing property, casualty or liability insurance to the Borrower or any Domestic Subsidiary of the Borrower, so long as such assets Indebtedness shall not be in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance for the year in which such Indebtedness is incurred and such Indebtedness shall be outstanding only during such year;
(g) Indebtedness consisting of Guarantees by the Borrower or by Domestic Subsidiaries of the Borrower of Indebtedness, leases or other ordinary course obligations permitted to be incurred by, or obligations in respect of Permitted Acquisitions or Permitted Joint Ventures of, the Borrower or Domestic Subsidiaries of the Borrower;
(h) Indebtedness arising from the conversion 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 (A) such Indebtedness (other than credit or purchase cards) is extinguished within three Business Days of its incurrence and (B) such Indebtedness in respect of credit or purchase cards in extinguished within 60 days from its incurrence;
(i) Indebtedness representing deferred compensation to employees of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Borrower and its Domestic Subsidiaries;
(j) additional Indebtedness of Holdings or such Restricted Subsidiary, the Borrower and its Domestic Subsidiaries not otherwise permitted by this Section 7.01 incurred after the Closing Date in an aggregate principal amount whichnot to exceed $3,000,000 at any time outstanding; provided that (A) no Default or Event of Default shall have occurred and be continuing immediately before and immediately after giving effect to such incurrence and (B) the Borrower shall have delivered to the Administrative Agent a certificate confirming compliance with clause (ii) of Section 7.12;
(k) Indebtedness owing from the Borrower or any Subsidiary to any other Subsidiary or Borrower and Guarantees made by the Borrower or any Subsidiary of Indebtedness of any other Subsidiary or the Borrower; provided that the aggregate Indebtedness and Guarantees outstanding at any time from a Group Party to a Subsidiary that is not a Loan Party (or in support of such Indebtedness) shall not exceed the Available Amount; and
(l) Indebtedness evidenced by Capital Lease Obligations, deferred purchase price, industrial revenue bonds or similar financing or purchase money or other Indebtedness entered into in order to acquire or finance assets used or useful in the business of the Borrower and its Subsidiaries, which Indebtedness, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and Indebtedness incurred pursuant to under this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (dl), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not 1,500,000 at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 1 contract
Sources: Credit Agreement (Fairchild Corp)
Limitation on Indebtedness. Holdings Neither the Borrower nor any Subsidiary of the Borrower will not, and will not permit incur or be obligated on any Restricted Subsidiary to create, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock either directly or shares indirectly, by way of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the ObligationsGuarantee, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock suretyship or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations)otherwise, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is other than:
(i) unsecured or Indebtedness evidenced by the Notes;
(ii) is secured Unsecured trade accounts payable and normal accruals incurred in the ordinary course of business which are not yet due and payable;
(iii) Indebtedness incurred in the ordinary course of business in connection with the acquisition of Property by Borrower (excluding Indebtedness assumed on any capital assets that do acquired pursuant to an Acceptable Acquisition) which shall not become Collateral, either exceed at any one time Ten Million Dollars (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured$10,000,000.00), after giving effect to the incurrence of provided that any such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater value of the Property so acquired;
(xiv) $550,000,000 and The following categories of Indebtedness, all of which, in the aggregate, together with the payments permitted by Section 7.2(l) (yOperating Leases) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) shall not exceed at any one time outstanding. The foregoing limitations will not apply to:Twenty-Five Million Dollars ($25,000,000.00):
(aA) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) incurred in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement ordinary course of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) business in connection with the sale by Borrower of unsecured corporate notes, bonds or other unsecured commercial paper in any public or private offering; and
(B) Other unsecured Indebtedness assumed by Borrower or a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance connection with Section 5.2(a);
(e) an Acceptable Acquisition or any other unsecured Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;.
(fv) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, Subordinated Debt (y) incurred or assumed in connection with one or more Acceptable Acquisitions not to exceed in the acquisition or disposition of any business, assets or a Subsidiary or other Person, aggregate $20,000,000.00 and (z) incurred other than guarantees of Indebtedness in connection with an Acceptable Acquisition not to exceed in the aggregate $150,000,000.00 less any Subordinated Debt incurred by any Person acquiring in connection with an Acceptable Acquisition, provided that all or any portion such Subordinated Debt is unsecured, and the holder of such business, assets or Subordinated Debt has executed a Subsidiary for Subordination and Standby Agreement in favor of Agents and the purpose of financing such acquisition;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, Lenders substantially in the ordinary course form of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferenceExhibit H attached hereto, which when aggregated with the principal amount Subordination and liquidation preference of all Standby Agreement shall, among other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of things: (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such IndebtednessSubordinated Debt was incurred in connection with an Acceptable Acquisition, Disqualified Stock notwithstanding any terms of the subordinated debt to the contrary, allow for permitted payments of accrued interest and scheduled principal (but no prepayments or shares accelerated payments) on such Subordinated Debt prior to notice from Administrative Agent of preferred stock is secured by a Lien on the Collateral occurrence of an Event of Default on a pari passu basis with schedule no faster than a three year, straight line amortization of principal of the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Subordinated Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such IndebtednessSubordinated Debt was incurred other than in connection with an Acceptable Acquisition, Disqualified Stock or shares notwithstanding any terms of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal subordinated debt to the Consolidated Secured contrary, allow for permitted payments of accrued interest only (and no principal payments, prepayments or accelerated payments) on such Subordinated Debt to Consolidated EBITDA Ratio immediate prior to such acquisitionnotice from Administrative Agent of the occurrence of an Event of Default, merger, consolidation or designation or and (B) less than after notice from Administrative Agent of the occurrence of an Event of Default, terminate all payments of principal and interest on the Subordinated Debt until Borrower's Obligations are paid in full and shall otherwise prohibit the holder of such Subordinated Debt from taking any action to enforce the Subordinated Debt obligations against Borrower or equal to 5.50:1.00 or (3) if any other Obligor for a one year period following such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, thenotice.
Appears in 1 contract
Sources: Credit Agreement (Staffmark Inc)
Limitation on Indebtedness. Holdings (a) The Borrower will not, and will not permit any Restricted Subsidiary to to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares except:
(i) Indebtedness under the Owl Rock Credit Facility and refinancings thereof not in excess of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio principal amount of Holdings and the Restricted Subsidiaries $50,000,000;
(including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such ii) Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis Subsidiary Guarantor to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 Borrower or (B) of the Fixed Charge Coverage Ratio Borrower or any Subsidiary Guarantor to any Subsidiary Guarantor;
(iii) Indebtedness of Holdings a Designated Non-Guarantor to the Borrower or any Subsidiary Guarantor that would qualify as a Permitted Investment of the Borrower or such Subsidiary Guarantor under the provisions of subsection 7.9;
(iv) Indebtedness of any Person that becomes a Subsidiary of the Borrower, to the extent such Indebtedness is outstanding at the time such Person becomes a Subsidiary of the Borrower and was not incurred in contemplation thereof; provided, that such Indebtedness is non-recourse to the Borrower and the Restricted Subsidiaries, after giving effect to other Loan Parties and the incurrence aggregate amount of all such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will outstanding shall not apply to:
(a) Indebtedness arising under the Credit Documentsexceed $6,200,000;
(bv) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in respect of capital leases, finance leases and purchase money obligations for fixed or capital assets; provided, that the aggregate amount of all such Indebtedness at any one time outstanding shall not to exceed €500,000,000$10,000,000;
(cvi) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings Endorsement of negotiable instruments for deposit or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued collection in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance business or surety bonds, health, disability consistent with past practice or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insuranceindustry practice;
(fvii) Indebtedness arising from agreements in the form of Holdings taxes, assessments, governmental charges or a Restricted Subsidiary providing levies and claims for indemnificationlabor, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with materials and supplies to the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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 acquisitionextent that payment therefor shall not be past due;
(gviii) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(hA) Indebtedness of a Restricted Securitization Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or in respect of a Guarantor incur such Permitted Securitization Financing and refinancings thereof which qualify as Permitted Securitization Financing and which are only Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; providedSecuritization Subsidiary, further, that and (B) any subsequent transfer of any such Permitted Subordinate Indebtedness (except as defined in the Owl Rock Credit Facility) permitted to Holdings or another Restricted Subsidiary) shall be deemedremain outstanding under the Owl Rock Credit Facility, and any refinancings thereof which qualify as Permitted Subordinate Indebtedness under the Owl Rock Credit Facility and any related loan documents in each case to be an incurrence of such Indebtedness not permitted by this clauseconnection therewith;
(iix) shares of preferred stock Indebtedness of a Restricted Subsidiary issued Designated Non-Guarantor in respect of a Permitted DNG Policy Financing owed to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event a Person which results in any such Restricted Subsidiary ceasing to be is not a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clauseLoan Party;
(jx) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes)Indebtedness solely resulting from a pledge of the membership interests or other equity interests in a Designated Non-Guarantor owned by the Borrower or a Subsidiary securing indebtedness of such Designated Non-Guarantor which is otherwise permitted under this Agreement and is otherwise non-recourse to the Borrower and the other Loan Parties;
(kxi) obligations Indebtedness owed by a Loan Party to a Designated Non-Guarantor which is unsecured (and which may be subordinated to the Owl Rock Credit Facility), which is permitted to remain outstanding under the Owl Rock Credit Facility, or is otherwise approved by the Lender;
(xii) Indebtedness of the Borrower or any Subsidiary in respect of self-insuranceperformance bonds, performancewarranty bonds, bidbid bonds, appealappeal bonds, and surety bonds, labor bonds and completion and performance guarantees and similar obligations obligations, provided by Holdings in the ordinary course of business or consistent with past practice or industry practice;
(xiii) Indebtedness of the Borrower or any Restricted Subsidiary or obligations in respect of (A) letters of creditcredit (including standby and commercial), bankers’ acceptances, bank guarantees or other similar instruments related theretoor obligations issued, in each caseor relating to liabilities or obligations incurred, in the ordinary course of business or consistent with past practice;
practice or industry practice (iincluding those issued to governmental entities in connection with self-insurance under applicable workers’ compensation statutes), (B) IndebtednessHedging Obligations that were not entered into for speculative purposes, Disqualified Stock (C) netting services, automatic clearinghouse arrangements, overdraft protection and preferred stock other arrangements arising under standard business terms of Holdings any bank at which the Borrower or any Restricted Subsidiary in maintains an aggregate principal amount overdraft, cash pooling or liquidation preference other similar facility or arrangement, (together with D) the endorsement of instruments for deposit or the financing of insurance premiums for insurance maintained by the Borrower or its Subsidiaries, (E) Indebtedness owed to any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue Person providing insurance, workers’ compensation, health, disability or sale of Equity Interests of Holdings or cash contributed other employee benefits to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings Borrower or any of its Subsidiaries) Subsidiaries (or any of its directors, officers, employees or contractors), so long as determined such Indebtedness shall not be in accordance with Sections 10.5(a)(iii)(B) excess of the amount of the unpaid cost of, and 10.5(a)(iii)(C) shall be incurred only to defer the extent cost of the annual premium for such net cash proceeds insurance or cash have not been applied pursuant other applicable costs related to such clauses to make Restricted Payments workers’ compensation, health, disability or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) employee benefits and (cF) of Bank Products Obligations;
(xiv) other unsecured Indebtedness incurred by the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings Borrower or any Restricted Subsidiary not otherwise permitted hereunder of its Subsidiaries in an aggregate principal outstanding amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii)xiv) that, taken together with any Permitted Sponsor Support Indebtedness that is not subordinated to the Owl Rock Credit Facility, does not exceed $3,500,000 in the aggregate at any one time outstanding exceed outstanding; and
(xv) any other Indebtedness approved by the greater Lender in writing (which may be by email) (it being understood Indebtedness under the SPV Investment Documents is approved).
(b) For purposes of determining compliance with this subsection 7.1, (xi) $825,000,000 in the event that an item of Indebtedness (or any portion thereof) meets the criteria of more than one of the categories of Indebtedness permitted by this subsection 7.1, the Borrower may, in its sole discretion, classify (and subsequently reclassify), at the time of Incurrence or any time thereafter, such item of Indebtedness (or any portion thereof) in any such category and will only be required to include such Indebtedness (or any portion thereof) in one of the categories of Indebtedness permitted in this subsection 7.1 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basisii) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to Incurrence or at any time thereafter, the Borrower may, in its respective maturity; providedsole discretion, that such Refinancing Indebtedness divide and classify (1and subsequently reclassify) has a weighted average life to maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured in any manner expressly permitted by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance this Agreement an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount item of Indebtedness (other or any portion thereof) in more than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) one of the definition categories of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described permitted in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, thesubsection 7.1.
Appears in 1 contract
Limitation on Indebtedness. Holdings will (a) Parent shall not and shall not permit any of the Restricted Subsidiaries to Incur any Indebtedness (including Acquired Indebtedness and Construction Indebtedness) if, immediately after giving effect to the Incurrence of such additional Indebtedness and the receipt and application of the proceeds therefrom, the aggregate principal amount of all outstanding Indebtedness of the Restricted Subsidiaries on a consolidated basis would be greater than 65% of their Adjusted Total Assets.
(b) Parent shall not, and will shall not permit any of the Restricted Subsidiary Subsidiaries to, Incur any Secured Indebtedness (including Acquired Indebtedness and Construction Indebtedness) if, immediately after giving effect to createthe Incurrence of such additional Secured Indebtedness and the receipt and application of the proceeds therefrom, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise the aggregate principal amount of all outstanding Secured Indebtedness of the Restricted Subsidiaries on a consolidated basis would be greater than 45% of their Adjusted Total Assets.
(collectively, “incur” c) Parent shall not and collectively, an “incurrence”) with respect shall not permit any of the Restricted Subsidiaries to Incur any Indebtedness (including Acquired Indebtedness) and Holdings will not issue ); provided, however, that any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantorsmay Incur Indebtedness (including Acquired Indebtedness and Construction Indebtedness) if, preferred stockafter giving effect to the Incurrence of such Indebtedness and the receipt and application of the proceeds therefrom, the Interest Coverage Ratio of the Restricted Subsidiaries on a consolidated basis would be at least 2.0 to 1.0; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur amount of Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness Incurred by Restricted Subsidiaries that are not Subsidiary Guarantors shall not exceed in the aggregate 8.0% of Adjusted Total Assets of the Restricted Subsidiaries.
(d) Notwithstanding paragraph (a), (b) or (c) above, Parent or any of the Restricted Subsidiaries (except as specified below) may Incur each and all of the following:
(i) Indebtedness of Parent or any of the Restricted Subsidiaries outstanding under any Credit Facility at any time in an aggregate principal amount not to exceed the greater of (x) $550,000,000 1.8 billion and (y) 50.040% of Consolidated EBITDA for Adjusted Total Assets of Parent and the most recently ended Test Period Restricted Subsidiaries;
(calculated on a Pro Forma Basisii) at Indebtedness of Parent or any one time outstanding. The foregoing limitations will not apply of the Restricted Subsidiaries owed to:
(a1) the Issuers evidenced by an unsubordinated promissory note, or
(2) Parent or any Restricted Subsidiary; provided, however, that any event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary of Parent or any subsequent transfer of such Indebtedness (other than to Parent or any other Restricted Subsidiary) shall be deemed, in each case, to constitute an Incurrence of such Indebtedness not permitted by this clause (2);
(iii) Indebtedness arising of Parent or any of the Restricted Subsidiaries under Interest Rate Agreements; provided that such agreements (x) are designed primarily to protect Parent or any of the Restricted Subsidiaries against fluctuations in foreign currency exchange rates or interest rates (whether fluctuations of fixed to floating rate interest or floating to fixed rate interest) and (y) do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in foreign currency exchange rates or interest rates or by reason of fees, indemnities and compensation payable thereunder;
(iv) Indebtedness of Parent or any of the Restricted Subsidiaries, to the extent the net proceeds thereof are promptly:
(1) used to purchase Notes tendered in a Change of Control Offer made as a result of a Change of Control Triggering Event,
(2) used to redeem all of the Notes pursuant to Section 5 of the Notes,
(3) deposited to defease the Notes as described in Sections 8.02 and 8.03, or
(4) deposited to discharge the obligations under the Notes and this Indenture as described in Section 8.01;
(v) Permitted Government Revenue Bond Indebtedness;
(vi) (i) Guarantees by Parent of Indebtedness of an Issuer or any of the Subsidiary Guarantors; (ii) Guarantees of Indebtedness of Parent or an Issuer by any of the Subsidiary Guarantors; provided the guarantee of such Indebtedness is permitted by and made in accordance with Section 4.14; and (iii) Guarantees by a Subsidiary Guarantor of any Indebtedness of any other Subsidiary Guarantor;
(vii) Indebtedness outstanding on the Issue Date (other than Indebtedness under the Credit DocumentsAgreement (other than the Term B Loan) or Indebtedness represented by the Notes and the Guarantees);
(bviii) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in Notes and the aggregate amount not to exceed €500,000,000Guaranties issued on the Issue Date;
(c) (iix) Indebtedness consisting of obligations to pay insurance premiums Incurred in the ordinary course of business;
(including x) Indebtedness in respect of any unused commitmentbankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities, and reinvestment obligations related thereto, entered into in the ordinary course of business;
(xi) outstanding on Indebtedness in respect of workers’ compensation claims, unemployment or other insurance or self-insurance obligations, indemnities, bankers’ acceptances, performance, bid completion, return-of-money, appeal and surety bonds or guarantees and similar types of obligations in the Closing Date listed on Schedule 10.1 ordinary course of business;
(xii) Indebtedness represented by cash management obligations and other obligations in respect of credit or debit card services, netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case in connection with deposit accounts;
(xiii) Indebtedness supported by a letter of credit procured by Parent or any of the Restricted Subsidiaries in a principal amount not in excess of the stated amount of such letter of credit and where the underlying Indebtedness would otherwise be permitted;
(xiv) Permitted Refinancing Indebtedness Incurred in exchange for, or the net proceeds of which are used to the Disclosure Letter and (ii) intercompany refund, refinance or replace, Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed Indebtedness) that was permitted by a Credit Party this Indenture to another Credit Partybe Incurred under the provisions of Sections 4.08(a), (b) or (c) or clauses (vii), (viii), (xiv), (xv), (xvi), (xx) or (xxi) of this Section 4.08(d);
(dxv) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred ) Incurred by Holdings Parent or any Restricted SubsidiarySubsidiary within 270 days of the related purchase, lease or improvement, to finance the purchase, lease, construction, installation, maintenance, replacement lease or improvement of property (real or personal) or equipment that is used in the business of Parent or useful in a Similar Businessany Restricted Subsidiary, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then not to exceed at any one time outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 100,000,000 and (y) 50.02.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma BasisAdjusted Total Assets at any time outstanding; provided, however, that any Permitted Refinancing Indebtedness Incurred under Section 4.08(d)(xiv) at the time in respect of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary Indebtedness Incurred pursuant to this Section 4.08(d)(xv) shall be deemed to have been Incurred under this Section 4.08(d)(xv) for purposes of determining the amount of Indebtedness that may at any time be Incurred under this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a4.08(d)(xv);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(fxvi) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout price or similar obligations, in each case, incurred or assumed obligations Incurred in connection with the acquisition or disposition of any business, assets or a Subsidiary or other PersonRestricted Subsidiary, other than guarantees Guarantees of Indebtedness incurred Incurred by any other Person for the purpose of acquiring all or financing the acquisition of any portion of such business, assets or a Subsidiary for the purpose of financing such acquisitionRestricted Subsidiary;
(gxvii) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer contingent liabilities in respect of any Capital Stock or any other event which results indemnification, adjustment of purchase price, non-compete, consulting, deferred taxes and similar obligations of Parent and the Restricted Subsidiaries Incurred in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clauseconnection with acquisitions;
(hxviii) Indebtedness in respect of a Restricted Subsidiary owing (i) taxes, assessments, governmental charges or levies and (ii) deferred compensation to Holdings or another Restricted Subsidiary; provided that if employees Incurred in the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right ordinary course of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausebusiness;
(ixix) shares Indebtedness arising from or in connection with accounts payable for deferred purchase price of preferred stock of a Restricted Subsidiary issued to Holdings property or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, services in the ordinary course of business or consistent greater than 90 days past the invoice billing date which are being contested in good faith by appropriate proceedings and for which adequate reserves shall be have been established in conformity with past practiceGAAP;
(ixx) Indebtedness, Disqualified Stock additional Indebtedness of Parent and preferred stock of Holdings or any the Restricted Subsidiary Subsidiaries in an aggregate principal amount or liquidation preference (together with at any time outstanding not to exceed the greater of $200,000,000 and 4.0% of Adjusted Total Assets; provided, however, that any Permitted Refinancing Indebtedness Incurred under clause (xiv) above in respect thereofof such Indebtedness shall be deemed to have been Incurred under this clause (xx) up to 100% for purposes of determining the net cash proceeds received amount of Indebtedness that may at any time be Incurred under this clause (xx); and
(xxi) Indebtedness of any Person (1) outstanding on the date of any acquisition of such Person, including through the acquisition of a Person that becomes a Subsidiary of Parent or is acquired by, or merged or consolidated with or into, the Issuers or any Subsidiary of Parent, or that is assumed by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings Parent or any of its Subsidiaries) as determined Restricted Subsidiaries in accordance connection with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent any 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 10.5(b) or to make Permitted Investments acquisition (other than Permitted Investments specified Indebtedness Incurred by such Person in clauses connection with, or in contemplation of, such acquisition, merger or consolidation) or (a2) and (c) Incurred by Parent or any of its Subsidiaries to provide all or any portion of the definition thereof) and (ii) Indebtednessfunds utilized to acquire, Disqualified Stock or preferred stock to consummate the transaction or series of Holdings related transactions in connection with or in contemplation of any acquisition of, any Investments or other securities or assets, including through the acquisition of a Person that becomes a Subsidiary of Parent or is acquired by, or merged or consolidated with or into, Parent or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferenceof Parent, which when aggregated with provided, however, that immediately after giving effect to the principal amount and liquidation preference Incurrence of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred such Indebtedness pursuant to this clause (l)(ii)xxi) and, does not at if applicable, the repayment, repurchase, defeasance, redemption, refinancing or other discharge of any one time outstanding exceed other Indebtedness in connection with such acquisition, merger or consolidation and the greater other pro forma adjustments, if applicable, set forth in the definition of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated “Interest Coverage Ratio” on a Pro Forma Basispro forma basis, either (i) Parent would have been able to Incur at least $1.00 of additional Indebtedness under each of Sections 4.08(a) and 4.08(c) or (ii) the time Interest Coverage Ratio of incurrence Parent would have been greater than or equal to the Interest Coverage Ratio immediately prior to such transaction;
(it being understood e) Notwithstanding any other provision of this Section 4.08, the maximum amount of Indebtedness that Parent or any Indebtedness, Disqualified Stock or preferred stock incurred of the Restricted Subsidiaries may Incur pursuant to this clause (l)(ii) Section 4.08 shall cease not be deemed to be deemed incurred or exceeded, with respect to any outstanding for Indebtedness, due solely to the result of fluctuations in the exchange rates of currencies. For purposes of determining compliance with this clause (l)(ii) but shall be deemed incurred for Section 4.08, in the purposes event that an item of Indebtedness meets the criteria of more than one of the first categories of permitted Indebtedness described in clauses (i) through (xxi) of paragraph of this Section 10.1 from and after the first date on which Holdings (d) above or such Restricted Subsidiary could have incurred such Indebtednessis entitled to be Incurred pursuant to paragraphs (a), Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, the Issuers shall, in their sole discretion, be entitled to classify all or a portion of such item of Indebtedness on the date of its Incurrence and determine the order of such Incurrence (and may later reclassify such item of Indebtedness) and may divide and classify such Indebtedness in more than one of the types of Indebtedness described. At any time that Parent or the Restricted Subsidiaries would be entitled to have Incurred any then outstanding Indebtedness under paragraphs (a), (b) and (c) of this Section 4.08, such Indebtedness shall be automatically reclassified into Indebtedness Incurred pursuant to those paragraphs. Notwithstanding the foregoing, any Indebtedness Incurred on or prior to the Issue Date and outstanding under the Credit Agreement on the Issue Date (other than the Term B Loan) shall be deemed to have been Incurred under clause (l)(ii) andof paragraph (d) above and may not be reclassified. For the avoidance of doubt, this clause (m) the outstanding principal amount of any particular Indebtedness shall be counted only once and clause (n) below any obligations arising under any Guarantee, Lien, letter of credit or similar instrument supporting such Indebtedness shall not be double counted. For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, Disqualified Stock 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 preferred stock issued first committed, in the case of revolving credit debt; provided, however, 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 refinancelong as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums plus the amount of any reasonable premium (including reasonable tender premiums), defeasance costs and any reasonable fees and expenses Incurred in connection therewith (with the “Refinancing issuance of such new Indebtedness”) prior . The principal amount of any Indebtedness Incurred to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the refinance other Indebtedness, Disqualified Stock or preferred stock if Incurred in a different currency from the Indebtedness being refinanced, (2) shall be calculated based on the currency exchange rate applicable to the extent currencies in which such Refinancing respective Indebtedness refinances (i) Indebtedness is denominated that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to date of such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, therefinancing.
Appears in 1 contract
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising of the Borrower or any Subsidiary under the Credit Documentsthis Agreement or any other Loan Document;
(b) existing Indebtedness represented by of the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date Borrower and its Subsidiaries listed on Schedule 10.1 7.2 and any refinancing of same provided that any refinancing of unsubordinated debt to non-Affiliates shall be in compliance with the Disclosure Letter and Refinance Conditions in respect thereof. The following constitute such “Refinance Conditions”: (iia) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that it is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with that does not exceed the principal amount of all other Indebtednessthe debt being extended, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrencerenewed or refinanced; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness it is subordinated to the Obligations at least to the same extent as the Indebtedness debt being Refinanced extended, renewed or refinanced; (c) the representations, covenants and defaults applicable to it are no less favorable to Borrower than those applicable to the debt being extended, renewed or refinanced; (d) no additional Lien is granted to secure it; (e) no additional Person is obligated on such debt; and (3f) shall not include Indebtednessupon giving effect to it, Disqualified Stock no Default or preferred stock Event of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock Default exists.
(c) Indebtedness of the Borrowers or a GuarantorBorrower under Swap Contracts entered into solely to hedge interest rate exposure and not for speculative purposes;
(nd) Indebtedness, Disqualified Stock Indebtedness of the Borrower or preferred stock of (x) Holdings or a Restricted any Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be Indebtedness incurred pursuant to the foregoingTerm Loans or Revolving Credit Loans hereunder) incurred to finance the acquisition, together with construction or improvement of any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors fixed or capital assets, including obligations under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Financing Leases and any Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary assumed in accordance connection with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to acquisition of any such acquisition, merger, consolidation assets or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on any such assets prior to the Collateral acquisition thereof which Lien was not created in contemplation of such acquisition and on a pari passu basis with any extensions, renewals and replacements of any such Indebtedness that do not increase the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either outstanding principal amount thereof; provided that (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate such Indebtedness is incurred prior to or within 120 days after such acquisition, merger, consolidation acquisition or designation the completion of such construction or improvement and (B) less than or equal to 5.00:1.00, the aggregate principal amount of Indebtedness permitted by this paragraph (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basisd) shall be either not exceed $250,000 per fiscal year;
(Ae) less than or equal the Indebtedness of (i) any Subsidiary to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation Borrower or designation any other Subsidiary arising after the date hereof or (Bii) less than Borrower to any Subsidiary; and
(f) Subordinated Debt listed on Schedule 7.2 or equal otherwise permitted in writing by the Agent and the Required Lenders.
(g) Indebtedness or Obligations under any Cash Management Agreement and under any Secured Swap Contract with respect to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, thethe Term Loan.
Appears in 1 contract
Limitation on Indebtedness. Holdings will (a) Parent shall not and shall not permit any of the Restricted Subsidiaries to Incur any Indebtedness (including Acquired Indebtedness and Construction Indebtedness) if, immediately after giving effect to the Incurrence of such additional Indebtedness and the receipt and application of the proceeds therefrom, the aggregate principal amount of all outstanding Indebtedness of the Restricted Subsidiaries on a consolidated basis would be greater than 65% of their Adjusted Total Assets.
(b) Parent shall not, and will shall not permit any of the Restricted Subsidiary Subsidiaries to, Incur any Secured Indebtedness (including Acquired Indebtedness and Construction Indebtedness) if, immediately after giving effect to createthe Incurrence of such additional Secured Indebtedness and the receipt and application of the proceeds therefrom, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise the aggregate principal amount of all outstanding Secured Indebtedness of the Restricted Subsidiaries on a consolidated basis would be greater than 45% of their Adjusted Total Assets.
(collectively, “incur” c) Parent shall not and collectively, an “incurrence”) with respect shall not permit any of the Restricted Subsidiaries to Incur any Indebtedness (including Acquired Indebtedness) and Holdings will not issue ); provided, however, that any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantorsmay Incur Indebtedness (including Acquired Indebtedness and Construction Indebtedness) if, preferred stockafter giving effect to the Incurrence of such Indebtedness and the receipt and application of the proceeds therefrom, the Interest Coverage Ratio of the Restricted Subsidiaries on a consolidated basis would be at least 2.0 to 1.0; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur amount of Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness Incurred by Restricted Subsidiaries that are not Subsidiary Guarantors shall not exceed in the aggregate 8.0% of Adjusted Total Assets of the Restricted Subsidiaries.
(d) Notwithstanding paragraph (a), (b) or (c) above, Parent or any of the Restricted Subsidiaries (except as specified below) may Incur each and all of the following:
(i) Indebtedness of Parent or any of the Restricted Subsidiaries outstanding under any Credit Facility at any time in an aggregate principal amount not to exceed the greater of (x) $550,000,000 1.8 billion and (y) 50.040% of Consolidated EBITDA for Adjusted Total Assets of Parent and the most recently ended Test Period Restricted Subsidiaries;
(calculated on a Pro Forma Basisii) at Indebtedness of Parent or any one time outstanding. The foregoing limitations will not apply of the Restricted Subsidiaries owed to:
(a1) Indebtedness arising under the Credit Documents;Issuers evidenced by an unsubordinated promissory note, or
(b2) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings Parent or any Restricted Subsidiary; provided, to finance the purchasehowever, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary of Parent or any subsequent transfer of such Indebtedness (other than to Parent or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case case, to be constitute an incurrence Incurrence of such Indebtedness not permitted by this clause;
clause (h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposesii)(2);
(kiii) obligations in respect Indebtedness of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings Parent or any of the Restricted Subsidiaries under Interest Rate Agreements; provided that such agreements (x) are designed primarily to protect Parent or any of the Restricted Subsidiaries against fluctuations in foreign currency exchange rates or interest rates (whether fluctuations of fixed to floating rate interest or floating to fixed rate interest) and (y) do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in foreign currency exchange rates or interest rates or by reason of fees, indemnities and compensation payable thereunder;
(iv) Indebtedness of Parent or any of the Restricted Subsidiaries, to the extent the net proceeds thereof are promptly:
(1) used to purchase Notes tendered in a Change of Control Offer made as a result of a Change of Control Triggering Event,
(2) used to redeem all of the Notes pursuant to Section 5 of the Notes,
(3) deposited to defease the Notes as described in Sections 8.02 and 8.03, or
(4) deposited to discharge the obligations under the Notes and this Indenture as described in Section 8.01;
(v) Permitted Government Revenue Bond Indebtedness;
(vi) (i) Guarantees by Parent of Indebtedness of an Issuer or any of the Subsidiary Guarantors; (ii) Guarantees of Indebtedness of Parent or an Issuer by any of the Subsidiary Guarantors; provided the guarantee of such Indebtedness is permitted by and made in accordance with Section 4.14; and (iii) Guarantees by a Subsidiary Guarantor of any Indebtedness of any other Subsidiary Guarantor;
(vii) Indebtedness outstanding on the Issue Date (other than Indebtedness under the Credit Agreement (other than the Term B Loan) or Indebtedness represented by the Notes and each Guaranty);
(viii) Indebtedness represented by the Notes and each Guaranty issued on the Issue Date;
(ix) Indebtedness consisting of obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, to pay insurance premiums Incurred in the ordinary course of business or consistent with past practicebusiness;
(ix) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereofof any bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities, and reinvestment obligations related thereto, entered into in the ordinary course of business;
(xi) up to 100% Indebtedness in respect of workers’ compensation claims, unemployment or other insurance or self-insurance obligations, indemnities, bankers’ acceptances, performance, bid completion, return-of-money, appeal and surety bonds or guarantees and similar types of obligations in the net ordinary course of business;
(xii) Indebtedness represented by cash proceeds received by Holdings since immediately after the Closing Date from the issue management obligations and other obligations in respect of credit or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (debit card services, netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case, other than Excluded Contributions, any Cure Amount or proceeds case in connection with deposit accounts;
(xiii) Indebtedness supported by a letter of Disqualified Stock or sales of Equity Interests to Holdings credit procured by Parent or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to in a principal amount not in excess of the stated amount of such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares letter of preferred stock is secured by a Lien on credit and where the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall underlying Indebtedness would otherwise be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, thepermitted;
Appears in 1 contract
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of exist Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (iObligations) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Existing Indebtedness, but not any extensions, renewals or replacements of any such Indebtedness arising except (i) renewals and extensions permitted by the agreements evidencing any such Indebtedness and (ii) extensions and replacements of any such Indebtedness if the terms and conditions thereof are not materially less favorable to the obligor thereon or to the Lenders than the Indebtedness being extended or refinanced taken as a whole, and the average life to maturity thereof is greater than or equal to that of the Indebtedness being extended or refinanced; provided that any Indebtedness permitted under the Credit Documentspreceding clauses (i) and (ii) shall not (x) include any Indebtedness of an obligor that was not an obligor with respect to the Indebtedness being extended, renewed or refinanced or (y) exceed in a principal amount thereof (or accreted value thereof) plus accrued and unpaid interest on the Indebtedness being renewed, extended or refinanced (plus the amount of necessary fees and expenses incurred in connection therewith and any premiums paid on the Indebtedness repaid);
(b) Indebtedness represented of any Borrower to any of its Subsidiaries and Indebtedness of any Subsidiary of any Borrower to any Borrower or any other of its Subsidiaries; provided that (i) Indebtedness owed by any Borrower to any of its Subsidiaries that is not a Loan Party shall be subordinated to the Unsecured Asset Sale Bridge prior payment in full of the Obligations, (including ii) (A) Indebtedness of any guarantee thereofSubsidiary that is not a Loan Party to any Borrower or (B) Indebtedness of any Subsidiary that is not a Loan Party to any Subsidiary Loan Party shall be subordinated to the prior payment in full of the Obligations and (iii) so long as any Revolving Loans are outstanding under the Loan Documents, Indebtedness of any Subsidiary that is not a Loan Party owed to any Borrower or any Subsidiary Loan Party, shall not exceed an amount equal to MXN$125,000,000 in the aggregate amount not to exceed €500,000,000at any time;
(c) Guaranties by any Borrower of Indebtedness of any of its Subsidiaries and by any Subsidiary of any Borrower of Indebtedness of any Borrower or any other of its Subsidiaries; provided that Guaranties by any Borrower or any Subsidiary Loan Party of Indebtedness of any Subsidiary that is not a Loan Party (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 shall be subordinated to the Disclosure Letter prior payment in full of the Obligations and (ii) intercompany Indebtedness (including so long as any unused commitment) Revolving Loans are outstanding on under the Closing Date listed on Schedule 10.1 Loan Documents, shall not exceed an amount equal to MXN$125,000,000 in the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)aggregate at any time;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does Borrower’s Subsidiaries which are not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrenceLoan Parties; provided that Capitalized Lease Obligations incurred by Holdings (i) no Loan Party shall have any obligation to such Subsidiary to maintain or any Restricted preserve such entity’s financial condition or to cause such Subsidiary pursuant to this clause achieve certain levels of operation results and (dii) in connection with a Permitted Sale Leaseback such Indebtedness shall not be subject be, directly or indirectly, guaranteed by, or otherwise supported by, any Loan Party and no Person shall have recourse, directly or indirectly, to the foregoing limitation so long as the proceeds any Loan Party in respect of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Indebtedness;
(e) Indebtedness incurred The incurrence by Holdings any Borrower or any Restricted Subsidiary (including letter of credit its Subsidiaries of purchase money obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued incurred in the ordinary course of business)business in an amount outstanding at any one time as of the date of any such incurrence not to exceed 75% of the purchase price or fair market value of the asset purchased, in respect of workers’ compensation claims, deferred compensation, performance acquired or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insuranceconstructed;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, Borrower and its Subsidiaries to the Parent and its Subsidiaries (other than guarantees of the Subsidiary Loan Parties) subordinated to the Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition;hereunder on terms and conditions acceptable to Agent; and
(g) other Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theexceeding MXN$275,000,000.
Appears in 1 contract
Limitation on Indebtedness. Holdings will (a) Parent shall not and shall not permit any of the Restricted Subsidiaries to Incur any Indebtedness (including Acquired Indebtedness and Construction Indebtedness) if, immediately after giving effect to the Incurrence of such additional Indebtedness and the receipt and application of the proceeds therefrom, the aggregate principal amount of all outstanding Indebtedness and the Restricted Subsidiaries on a consolidated basis would be greater than 65% of their Adjusted Total Assets.
(b) Parent shall not, and will shall not permit any of the Restricted Subsidiary Subsidiaries to, Incur any Secured Indebtedness (including Acquired Indebtedness and Construction Indebtedness) if, immediately after giving effect to createthe Incurrence of such additional Secured Indebtedness and the receipt and application of the proceeds therefrom, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise the aggregate principal amount of all outstanding Secured Indebtedness of the Restricted Subsidiaries on a consolidated basis would be greater than 45% of their Adjusted Total Assets.
(collectively, “incur” c) Parent shall not and collectively, an “incurrence”) with respect shall not permit any of the Restricted Subsidiaries to Incur any Indebtedness (including Acquired Indebtedness) and Holdings will not issue ); provided, however, that any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantorsmay Incur Indebtedness (including Acquired Indebtedness and Construction Indebtedness) if, preferred stockafter giving effect to the Incurrence of such Indebtedness and the receipt and application of the proceeds therefrom, the Interest Coverage Ratio of the Restricted Subsidiaries on a consolidated basis would be at least 2.0 to 1.0; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur amount of Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness Incurred by Restricted Subsidiaries that are not Subsidiary Guarantors shall not exceed in the aggregate 2.0% of Adjusted Total Assets of the Restricted Subsidiaries.
(d) Notwithstanding paragraph (a), (b) or (c) above, Parent or any of the Restricted Subsidiaries (except as specified below) may Incur each and all of the following:
(1) Indebtedness of Parent or any of the Restricted Subsidiaries outstanding under any Credit Facility at any time in an aggregate principal amount not to exceed the greater of (x) $550,000,000 1.0 billion and (y) 50.040% of Consolidated EBITDA for Adjusted Total Assets of Parent and the most recently ended Test Period Restricted Subsidiaries;
(calculated on a Pro Forma Basis2) at Indebtedness of Parent or any one time outstanding. The foregoing limitations will not apply of the Restricted Subsidiaries owed to:
(ai) the Issuers evidenced by an unsubordinated promissory note, or
(ii) Parent or any Restricted Subsidiary; provided, however, that any event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary of Parent or any subsequent transfer of such Indebtedness arising under the Credit Documents(other than to Parent or any other Restricted Subsidiary) shall be deemed, in each case, to constitute an Incurrence of such Indebtedness not permitted by this clause (2);
(b3) Indebtedness of Parent or any of the Restricted Subsidiaries under Interest Rate Agreements; provided that such agreements (x) are designed primarily to protect Parent or any of the Restricted Subsidiaries against fluctuations in foreign currency exchange rates or interest rates (whether fluctuations of fixed to floating rate interest or floating to fixed rate interest) and (y) do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in foreign currency exchange rates or interest rates or by reason of fees, indemnities and compensation payable thereunder;
(4) Indebtedness of Parent or any of the Restricted Subsidiaries, to the extent the net proceeds thereof are promptly:
(i) used to purchase Notes tendered in a Change of Control Offer made as a result of a Change of Control,
(ii) used to redeem all of the Notes pursuant to Section 5 of the Notes,
(iii) deposited to defease the Notes as described in Sections 8.02 and 8.03, or
(iv) deposited to discharge the obligations under the Notes and this Indenture as described in Section 8.01;
(5) Permitted Government Revenue Bond Indebtedness;
(6) (i) Guarantees by the Parent of Indebtedness of an Issuer or any of the Subsidiary Guarantors; (ii) Guarantees of Indebtedness of Parent or an Issuer by any of the Subsidiary Guarantors; provided the guarantee of such Indebtedness is permitted by and made in accordance with Section 4.14; and (iii) Guarantees by a Subsidiary Guarantor of any Indebtedness of any other Subsidiary Guarantor;
(7) Indebtedness outstanding on the Issue Date (other than pursuant to clause (1) or (8));
(8) Indebtedness represented by the Notes and the Guaranties issued on the Issue Date and the exchange Notes and related exchange Guaranties to be issued in exchange for such Notes and Guaranties pursuant to the Registration Rights Agreement;
(9) Indebtedness consisting of obligations to pay insurance premiums incurred in the ordinary course of business;
(10) Indebtedness in respect of any bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities, and reinvestment obligations related thereto, entered into in the ordinary course of business;
(11) Indebtedness in respect of workers’ compensation claims, self-insurance obligations, indemnities, bankers’ acceptances, performance, completion and surety bonds or guarantees and similar types of obligations in the ordinary course of business;
(12) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) cash management obligations and other obligations in the aggregate amount not to exceed €500,000,000respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case in connection with deposit accounts;
(c) (i13) Indebtedness supported by a letter of credit procured by Parent or any of the Restricted Subsidiaries in a principal amount not in excess of the stated amount of such letter of credit and where the underlying Indebtedness would otherwise be permitted;
(including any unused commitment14) outstanding on Permitted Refinancing Indebtedness incurred in exchange for, or the Closing Date listed on Schedule 10.1 net proceeds of which are used to the Disclosure Letter and (ii) intercompany refund, refinance or replace, Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed Indebtedness) that was permitted by a Credit Party this Indenture to another Credit Partybe incurred under the provisions of Sections 4.08(a), (b) and (c) or clauses (7), (8), (14), (15) or (16) of this Section 4.08(d);
(d15) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred ) Incurred by Holdings Parent or any Restricted SubsidiarySubsidiary within 270 days of the related purchase, lease or improvement, to finance the purchase, lease, construction, installation, maintenance, replacement lease or improvement of property (real or personal) or equipment that is used in the business of Parent or useful in a Similar Businessany Restricted Subsidiary, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then not to exceed at any one time outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 50,000,000 and (y) 50.02.0% of Consolidated EBITDA for Adjusted Total Assets at any time outstanding; and
(16) additional Indebtedness of Parent and the most recently ended Test Period Restricted Subsidiaries in aggregate principal amount at any time outstanding not to exceed the greater of $100,000,000 and 4.0% of Adjusted Total Assets; provided, however, that any Permitted Refinancing Indebtedness incurred under clause (calculated on a Pro Forma Basis14) at the time above in respect of incurrence; provided that Capitalized Lease Obligations such Indebtedness shall be deemed to have been incurred by Holdings or any Restricted Subsidiary pursuant to under this clause (d16) in connection with a Permitted Sale Leaseback shall not for purposes of determining the amount of Indebtedness that may at any time be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(aincurred under this clause (16);.
(e) Notwithstanding any other provision of this Section 4.08, the maximum amount of Indebtedness incurred by Holdings that Parent or any of the Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations Subsidiaries may Incur pursuant to this Section 4.08 shall not be deemed to be exceeded, with respect to letters any outstanding Indebtedness, due solely to the result of credit issued fluctuations in the ordinary course exchange rates of business), in respect currencies. For purposes of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness determining compliance with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each caseSection 4.08, in the ordinary course event that an item of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock Indebtedness meets the criteria of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% more than one of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale categories of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified permitted Indebtedness described in clauses (a1) and through (c16) of the definition thereofparagraph (d) and (ii) Indebtedness, Disqualified Stock above or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and is entitled to be incurred pursuant to this clause paragraphs (l)(iia), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, the Issuers shall, in their sole discretion, be entitled to classify all or a portion of such item of Indebtedness on the date of its incurrence or issuance and determine the order of such incurrence or issuance (and may later reclassify such item of Indebtedness) and may divide and classify such Indebtedness in more than one of the types of Indebtedness described. At any time that Parent or the Restricted Subsidiaries would be entitled to have incurred any then outstanding Indebtedness under paragraphs (a), (b) and (c) of this Section 4.08, such Indebtedness shall be automatically reclassified into Indebtedness incurred pursuant to those paragraphs. Notwithstanding the foregoing, any Indebtedness Incurred on or prior to the Issue Date and outstanding under the Credit Agreement on the Issue Date shall be deemed to have been incurred under clause (l)(i1) andof paragraph (d) above and may not be reclassified. For the avoidance of doubt, this clause (m) the outstanding principal amount of any particular Indebtedness shall be counted only once and clause (n) below any obligations arising under any Guarantee, Lien, letter of credit or similar instrument supporting such Indebtedness shall not be double counted. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, Disqualified Stock 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 preferred stock issued to so refinancefirst committed, replacein the case of revolving credit debt; provided, refundhowever, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) that if such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock Indebtedness is incurred to pay premiums refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced, plus the amount of any reasonable premium (including reasonable tender premiums), defeasance costs and any reasonable fees and expenses incurred in connection therewith (with the “Refinancing issuance of such new Indebtedness”) prior . The principal amount of any Indebtedness incurred to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the refinance other Indebtedness, Disqualified Stock or preferred stock if incurred in a different currency from the Indebtedness being refinanced, (2) shall be calculated based on the currency exchange rate applicable to the extent currencies in which such Refinancing respective Indebtedness refinances (i) Indebtedness is denominated that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to date of such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, therefinancing.
Appears in 1 contract
Limitation on Indebtedness. Holdings The Credit Parties will not, and will not permit any Restricted Subsidiary to contract, create, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect permit to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising or existing under this Agreement and the Credit Documentsother Loan Documents and Indebtedness constituting permanent mortgage financing for a hotel property;
(b) Indebtedness represented by of the Unsecured Asset Sale Bridge (including any guarantee thereof) Credit Parties existing as of the Closing Date as referenced in the aggregate financial statements referenced in Section 5.5 (and set out more specifically in Schedule 8.1) hereto and renewals, refinancings or extensions thereof in a principal amount not to exceed €500,000,000in excess of the original principal balance thereof, except if such excess arises from an increase in the value of collateral, as demonstrated by an Appraisal;
(c) Indebtedness of the Credit Parties incurred after the Closing Date consisting of Capital Leases or Indebtedness incurred to provide all or a portion of the purchase price or cost of construction of an asset; provided that (i) such Indebtedness (including any unused commitment) outstanding on when incurred shall not exceed the Closing Date listed on Schedule 10.1 to the Disclosure Letter purchase price for each acquired asset or cost of construction for such constructed asset; and (ii) intercompany no such Indebtedness (including any unused commitment) outstanding on shall be refinanced for a principal amount in excess of the Closing Date listed on Schedule 10.1 to original principal balance thereof, except if such excess arises from an increase in the Disclosure Letter (other than intercompany Indebtedness owed value of collateral, as demonstrated by a Credit Party to another Credit Party)an Appraisal;
(d) Unsecured intercompany Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance among the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrenceCredit Parties; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause such Indebtedness shall be (di) in connection with a Permitted Sale Leaseback shall not be subject fully subordinated to the foregoing limitation so long Obligations hereunder on terms reasonably satisfactory to the Agent and (ii) evidenced by promissory notes which shall be pledged to the Agent as Collateral for the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Obligations;
(e) Indebtedness incurred by Holdings and obligations owing under Hedging Agreements entered into in order to manage existing or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;anticipated interest rate risks and not for speculative purposes; and
(f) Indebtedness arising from agreements Guaranty Obligations in respect of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) Credit Party to the extent such net cash proceeds Indebtedness is permitted to exist 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 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and be incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the8.1.
Appears in 1 contract
Sources: Revolving Credit Loan Agreement (Hersha Hospitality Trust)
Limitation on Indebtedness. Holdings will notNot, and will not permit any Restricted Subsidiary to (other than Unrestricted Subsidiaries) to, create, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising obligations under this Agreement and the Credit other Loan Documents;
(b) Indebtedness represented by of Subsidiaries to the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000Company;
(c) (i) unsecured Indebtedness (including any unused commitment) outstanding on of the Closing Date listed on Schedule 10.1 Company to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter Subsidiaries (other than intercompany Indebtedness owed by a Credit Party to another Credit PartyUnrestricted Subsidiaries);
(d) Subordinated Debt;
(e) Hedging Obligations incurred for bona fide hedging purposes and not for speculation;
(f) Indebtedness existing on the Initial Closing Date and described on Schedule 9.7 (including Capitalized Lease Obligationsamounts available under commitments related thereto but not yet drawn upon) (the "Existing Indebtedness") and any Indebtedness extending the maturity of, or refunding or refinancing, such Existing Indebtedness, provided that (i) the principal amount of such Existing Indebtedness shall not be increased above the lesser of (x) the amount thereof immediately prior to such extension, refunding or refinancing (including amounts available under commitments related thereto but not yet drawn upon) and (y) the amount set forth across from such Indebtedness on Schedule 9.7 under the column "Current Balance", and (ii) the direct or contingent obligors therefor shall not be changed as a result of or in connection with such extension, refunding or refinancing;
(g) Indebtedness secured by Liens permitted by clause (vi) of the definition of Permitted Liens, provided that the aggregate amount of all such Indebtedness at any time outstanding shall not exceed $5,000,000; and any Indebtedness extending the maturity of, or refunding or refinancing, such Indebtedness, provided that the principal amount of such Indebtedness shall not be increased above the amount thereof immediately prior to such extension, refunding or refinancing (including amounts available under commitments related thereto but not yet drawn upon), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase or contingent obligors therefor shall not be changed as a result of assets or in connection with such extension, refunding or refinancing; and
(h) other Indebtedness, in addition to the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiarylisted above, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) exceeding $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the5,000,000.
Appears in 1 contract
Sources: Credit Agreement (Carmax Inc)
Limitation on Indebtedness. Holdings will notCreate, and will not permit incur, assume or suffer to -------------------------- exist any Indebtedness of the Borrower or any Restricted Subsidiary to create, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of Borrower, except (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:without duplication):
(a) Indebtedness arising under the Credit Documentsthis Agreement or any other Loan Document;
(b) intercompany Indebtedness represented by and among the Unsecured Asset Sale Bridge (including Borrower and any guarantee thereof) in the aggregate amount not to exceed €500,000,000of its Wholly Owned Restricted Subsidiaries;
(c) in the case of the Borrower, Interest Hedge Agreements entered into with the Lenders or any of them for the purpose of hedging against interest rate fluctuations with respect to variable rate Indebtedness of the Borrower or any of the Restricted Subsidiaries;
(i) in the case of the Borrower, Indebtedness (including any unused commitment) outstanding on in respect of the Closing Date listed on Schedule 10.1 to the Disclosure Letter Senior Subordinated Indebtedness and (ii) intercompany in the case of the Restricted Subsidiaries, Indebtedness (including any unused commitment) outstanding in respect of the Senior Subordinated Guaranties as in effect on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)date hereof;
(e) Indebtedness incurred by Holdings or any of the Borrower and the Restricted Subsidiary (including letter Subsidiaries of credit obligations consistent with past practice constituting reimbursement obligations with respect up to letters of credit issued $20,000,000 in the ordinary course aggregate at any time outstanding, plus amounts ---- assumed in connection with Permitted Acquisitions, consisting of businessPurchase Money Indebtedness and/or Capital Lease Obligations (provided that such -------- Indebtedness and Obligations so assumed are not incurred or created in connection with any such Permitted Acquisition and were not incurred or created in anticipation of such Permitted Acquisition), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with existing on the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;Effective Date and set forth on Schedule 8.2; ------------
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock the Borrower or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer consisting of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, Permitted Sales Representations in each case to be an incurrence incurred in connection with the disposition of such Indebtedness not permitted by this clauseany assets of the Borrower or any Restricted Subsidiary;
(h) unsecured Indebtedness of a Restricted Subsidiary owing the Borrower of up to Holdings or another Restricted Subsidiary; provided that if $10,000,000 in the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that aggregate at any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausetime outstanding;
(i) shares of preferred stock Indebtedness in respect of a Restricted Subsidiary issued to Holdings or another Restricted SubsidiaryQualified Issuance; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;and
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured permitted by a Lien ranking junior to the Liens securing the Obligations, Section 8.3 (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtednesse), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the. ---------------
Appears in 1 contract
Sources: Credit Agreement (Radio One Inc)
Limitation on Indebtedness. Holdings The Borrower will not, and will not permit any Restricted Subsidiary to to, create, incur, issueassume or permit to exist any Indebtedness, assume, guarantee except: Indebtedness created under the Loan Documents; Indebtedness existing on the date hereof and set forth on Schedule 6.07 and Refinancing Indebtedness in respect thereof; Indebtedness of the Borrower or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue the Borrower or any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stockother Subsidiary; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at have been transferred or pledged to any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter other Person, and (ii) intercompany such Indebtedness (including any unused commitment) outstanding on shall be incurred in compliance with Section 6.11; Indebtedness of the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings Borrower or any Restricted Subsidiary, Subsidiary incurred to finance the purchaseacquisition, lease, construction, installation, maintenance, replacement construction or improvement of property (real any fixed or personal) or equipment that is used or useful in a Similar Businesscapital assets, whether through the direct purchase of assets or the Capital Stock of including any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any businesssuch assets, assets or a Subsidiary or other Person, other than guarantees of and Refinancing Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition;
(g) Indebtedness of Holdings to a Restricted Subsidiaryin respect thereof; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted SubsidiaryA) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment incurred prior to or within 180 days after such acquisition or the Guarantee completion of such Guarantor construction or improvement and (B) immediately after giving effect to such Indebtedness, as if it had been incurred on the case may belast day of the most recent fiscal quarter for which financial statements have been delivered, the Borrower is in pro forma compliance with Section 6.06; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations owed in respect of selfany overdrafts and related liabilities arising from treasury, depository and cash management services or in connection with any automated clearing-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided house transfers of funds; other Indebtedness of the Borrower that is secured by Holdings or any Restricted Subsidiary or obligations Lien in respect an aggregate principal amount for all such Indebtedness incurred under this paragraph (f) not exceeding $25,000,000 at any time outstanding; Indebtedness under Film Contracts in an aggregate amount outstanding at any time not to exceed $18,000,000; other Indebtedness of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference for all such Indebtedness incurred under this paragraph (together with h) not exceeding $10,000,000 at any Refinancing time outstanding; and other unsecured Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted SubsidiaryBorrower; provided that the amount terms of such Indebtedness (other than Acquired Indebtedness)shall not prohibit, Disqualified Stock and preferred stock that may be incurred pursuant to restrict or impose any condition upon the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) ability of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings Borrower or any Restricted Subsidiary to create, incur or merged into permit to exist any Lien upon any of its property or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theassets.
Appears in 1 contract
Sources: Five Year Competitive Advance and Revolving Credit Facility Agreement (Belo Corp)
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising of the Parent and any of its Subsidiaries under this Agreement and the Credit other Loan Documents;
(b) Indebtedness represented by of the Unsecured Asset Sale Bridge (including Borrower to any guarantee thereof) in Subsidiary and of any Subsidiary Guarantor to the aggregate amount not to exceed €500,000,000Borrower or any other Subsidiary;
(c) Indebtedness of the Borrower and any of its Subsidiaries incurred to finance any acquisition of fixed or capital assets (i) whether pursuant to a loan, a Financing Lease or otherwise); provided that, the principal amount of such Indebtedness (including any unused commitment) does not exceed the aggregate purchase price of such property at the time it was acquired, and renewals, extensions and refinancings of such Indebtedness, provided that the amount of such Indebtedness outstanding on at the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)time of such renewal, extension or refinancing is not increased;
(d) Indebtedness (including Capitalized Lease Obligations)outstanding on the date hereof and listed on Schedule 7.2 and renewals, Disqualified Stock extensions and preferred stock incurred by Holdings or any Restricted Subsidiaryrefinancings thereof; provided that, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then such Indebtedness outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings such renewal, extension or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall refinancing is not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)increased;
(e) Indebtedness of a Person that becomes a Subsidiary of the Borrower after the date hereof, Indebtedness secured by property or assets acquired by any Subsidiary after the date hereof, Indebtedness assumed in connection with acquisitions of assets permitted by Section 7.10(g) and any Indebtedness incurred to refinance any such Indebtedness previously referred to in this Section 7.2(e); provided that, (i) such Indebtedness existed at the time such Person became a Subsidiary or such property or assets were acquired, as the case may be, and was not created in anticipation thereof or such Indebtedness is created to refinance any such existing Indebtedness and does not increase the outstanding principal amount thereof, (ii) any such refinanced Indebtedness is payable with interest and fees at rates consistent with those prevailing in the relevant market at the time of issuance (as determined in good faith by the Borrower), (iii) the other terms and conditions of any such refinanced Indebtedness referred to in this paragraph, taken as a whole, including, without limitation, the covenants, default provisions and representations and warranties, are not more restrictive than the terms and conditions of this Agreement (as determined in good faith by the Borrower); provided that, nothing in this Section 7.2(e) shall be deemed to prevent such Indebtedness from being secured by Liens permitted by Section 7.3(g), and (iv) immediately after giving effect to the acquisition of such Person, property or assets or such refinancing, as the case may be, no Default or Event of Default shall have occurred and be continuing;
(f) Indebtedness of the Parent, the Borrower or any Subsidiary under any Interest Rate Protection Agreement, Commodity Price Protection Agreement or Exchange Rate Protection Agreement permitted pursuant to Section 7.10;
(g) Indebtedness of the Parent to the Borrower or any of its Subsidiaries incurred to purchase, repurchase, redeem or retire the Parent’s Capital Stock, which Indebtedness is incurred when no Default or Event of Default has occurred and is continuing or would result therefrom and such purchase, repurchase, redemption or retirement is made in compliance with Section 7.8(h);
(h) so long as no Default or Event of Default shall have occurred and be continuing, Indebtedness of the Parent to the Borrower or any of its Subsidiaries incurred to cover reasonable and necessary expenses incurred by Holdings the Parent in connection with registration, public offerings and exchange listing of securities;
(i) Indebtedness of the Parent to the Borrower and its Subsidiaries in an amount sufficient to pay tax liabilities of the Parent which are paid in cash by the Parent to any taxing authority and which are franchise tax liabilities or other tax liabilities required to be paid to maintain its existence or which are attributable to income, business, properties or activities of, or distribution of earnings by, the Parent or its Subsidiaries; provided that, the Parent shall repay such Indebtedness upon receipt of any refunds of such tax payments in an amount equal to such refunds;
(j) Indebtedness of the Parent to the Borrower and its Subsidiaries (in addition to Indebtedness otherwise permitted by this Section 7.2) incurred to pay expenses in the ordinary course of business;
(k) Indebtedness of the Parent to the Borrower and its Subsidiaries incurred to pay premiums to insurance companies for directors’ and officers’ insurance with respect to the Parent;
(l) Indebtedness of the Parent to the Borrower and its Subsidiaries incurred to pay for the printing and distribution of financial reports of the Parent, proxy solicitations and other communications with shareholders of the Parent and for filings with the Securities and Exchange Commission and costs directly related to the annual meeting of shareholders of the Parent;
(m) Indebtedness of the Parent to the Borrower and its Subsidiaries incurred to pay directors’ fees and expenses to directors of the Parent;
(n) Indebtedness of the Parent to the Borrower and its Subsidiaries incurred to pay fees owed by the Parent to its transfer agent;
(o) Indebtedness of the Parent to the Borrower and its Subsidiaries, the proceeds of which are used to pay fees to the Parent’s independent auditors, tax advisors and outside attorneys in the ordinary course of business;
(p) Indebtedness incurred to exercise purchase options under leases (other than Financing Leases and Short Term Leases) for tractors, trailers and related equipment which leases are assumed or acquired subsequent to the Closing Date in connection with Permitted Acquisitions; provided that, (i) such Indebtedness is payable with interest and fees at rates consistent with those prevailing in the relevant market at the time of issuance (as determined in good faith by the Borrower), (ii) the other terms and conditions of such Indebtedness, taken as a whole, including, without limitation, the covenants, default provisions and representations and warranties, are not more restrictive than the terms and conditions of this Agreement (as determined in good faith by the Borrower); provided that, nothing in this clause shall be deemed to prevent such Indebtedness from being secured by Liens permitted by Section 7.3(h), and (iii) immediately after giving effect to the exercise of such purchase option, no Default or Event of Default shall have occurred and be continuing;
(q) Account Receivable Indebtedness of the Parent or any Restricted of its Subsidiaries not exceeding $75,000,000 in an aggregate principal amount at any one time outstanding;
(r) Indebtedness of any Receivables SPV arising out of any investment in such Receivables SPV made by the Parent, the Borrower or any Subsidiary of the Borrower in accordance with Section 7.10(q);
(including letter s) Indebtedness of credit obligations consistent any Subsidiary that is not a Loan Party to any Loan Party incurred in connection with past practice constituting reimbursement obligations a loan, advance or investment permitted by Section 7.10(r);
(t) Indebtedness of the Insurance Subsidiary with respect to letters of credit issued for its account and secured by Liens as permitted in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposesSection 7.3(k);
(ku) obligations Guarantee Obligations constituting Indebtedness that are otherwise permitted in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practiceSection 7.4;
(iv) Indebtedness in the form of lease liabilities under sale and leaseback transactions permitted by Section 7.13; and
(w) Outstanding Permitted Line of Credit Indebtedness, Disqualified Stock Permitted Specified Additional Debt, and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference other unsecured (together with any Refinancing or, to the extent permitted by Section 7.3(m), secured) Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings Parent or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have Subsidiaries not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified described in clauses (a) and through (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (cv) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness)that, Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in Indebtedness pursuant to this clause (nw), either: the Borrower shall be in compliance, on a pro forma basis, with the Leverage Ratio specified in Section 7.1(a) (i) calculated as at the end of the most recently ended fiscal quarter of the Parent for which financial statements have been delivered pursuant to Section 6.1 as if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) Holdings would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in had been incurred on the first paragraph day of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to four fiscal quarter period ended with such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, themost recently ended fiscal quarter).
Appears in 1 contract
Limitation on Indebtedness. Holdings will not, and will Borrower shall not permit at any Restricted Subsidiary to time create, incur, issue, incur or assume, guarantee or otherwise become liableor be liable (directly or indirectly) in respect of, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock orfor Borrowed Money, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply tothan:
(a) Indebtedness arising under this Agreement and the Credit other Loan Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000described on Schedule 5.9;
(c) (i) Additional Indebtedness so long as after giving effect to such Indebtedness (including any unused commitmentand the proforma application of the proceeds thereof) outstanding the Borrower would not on a proforma basis be in violation of the Closing Date listed on Schedule 10.1 covenants set forth in Sections 7.1 or 7.2 hereof, treating such Indebtedness and the application of the proceeds thereof as if they had been incurred at the start of the four quarter period prior to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);incurrence of such Indebtedness; and
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred evidenced by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Subordinated Debt;
(e) Indebtedness incurred by Holdings representing the refinancing of Subordinated Debt or any Restricted Subsidiary part thereof (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect "Refinanced Subordinated Debt") provided such Refinanced Subordinated Debt is on terms that are in Agent's discretion, at least as favorable to letters of credit issued Borrower, Agent and Lenders as the Subordinated Debt to be redeemed or refinanced thereby, provided (i) that no covenant contained in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock this Agreement or any other event which results Loan Document would be violated on the proposed issue date of the Refinanced Subordinated Debt after giving effect to (1) the issuance of notes and or debentures in any such Restricted Subsidiary ceasing connection therewith, (2) the payment of all insurance costs, commissions, discounts, redemption premiums, and other fees and charges associated therewith, (3) the use of proceeds thereof and (4) the redemption, repayment, or retirement of all Indebtedness of the Borrower to be a Restricted Subsidiary redeemed, repaid, or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, retired in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiaryconnection therewith; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) IndebtednessBorrower, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with Agent and the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes holders of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves Refinanced Subordinated Debt execute a subordination agreement upon terms reasonably satisfactory to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theAgent.
Appears in 1 contract
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to -------------------------- exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising under in respect of the Loans, and other obligations of the Credit Parties under this Agreement and the other Loan Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including of HCC to any guarantee thereof) in the aggregate amount not of its Subsidiaries and of any such Subsidiary which is a Credit Party to exceed €500,000,000HCC or any other Subsidiary of HCC;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date and listed on Schedule 10.1 to the Disclosure Letter 8.2(c) and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)all extensions, renewals, replacements, refinancings and modifications thereof permitted hereunder;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or and any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, its Subsidiaries in an aggregate principal amount which, when aggregated with not to exceed $10,000,000 at any time outstanding which is recourse only to the principal amount assets of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings HCC or any Restricted Subsidiary pursuant to this clause (d) in connection Subsidiaries acquired or financed with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Indebtedness;
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claimsFinancing Leases provided that, deferred compensation-------- after giving effect thereto, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurancesubsection 8.7 is not contravened;
(f) Indebtedness arising from agreements in respect of Holdings or a Restricted Subsidiary providing for indemnificationSubordinated Debt, adjustment the terms and conditions of purchase pricewhich have been approved in writing by the Required Lenders and all extensions, earnout or similar obligationsrenewals, in each casereplacements, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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 acquisitionrefinancings and modifications thereof permitted hereunder;
(g) Indebtedness of Holdings to a Restricted SubsidiaryUnqualified Subsidiaries of Holdings; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clauseis Non-Recourse Indebtedness;
(h) Indebtedness of a Restricted Person which becomes a Subsidiary owing after the date hereof in an aggregate principal amount not exceeding as to Holdings or another Restricted Subsidiary; and its Subsidiaries $10,000,000 at any time outstanding, provided that if (i) such -------- indebtedness existed at the Borrowers or time such Person became a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is and was not the Borrowers or a Guarantor, such Indebtedness is subordinated created in right of payment anticipation thereof and (ii) immediately after giving effect to the Guarantee acquisition of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Person by Holdings or another Restricted Subsidiary) any of its Subsidiaries no Default or Event of Default shall have occurred and be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausecontinuing;
(i) shares Indebtedness in respect of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted SubsidiaryEquipment Lease Tranche A Loans; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;and
(j) Hedging Obligations Indebtedness not contemplated by clauses (excluding Hedging Obligations entered into for speculative purposes);
(ka)-(i) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, above not exceeding $5,000,000 in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 1 contract
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising of the Borrower (i) under this Agreement and (ii) under the Credit DocumentsConvertible Debentures;
(bi) Indebtedness represented by of the Unsecured Asset Sale Bridge Borrower to any Subsidiary and of any Subsidiary Guarantor to the Borrower or any other Subsidiary and (including any guarantee thereofii) Indebtedness of the Borrower in respect of cash advances from Meldisco in anticipation of dividends, income distributions and royalties due from Meldisco to the aggregate amount not to exceed €500,000,000Borrower;
(c) (i) Indebtedness (including of the Borrower and any unused commitment) outstanding on of its Restricted Subsidiaries incurred after the Initial Closing Date listed on Schedule 10.1 to finance the Disclosure Letter and acquisition, construction or completion of fixed or capital assets (ii) intercompany whether pursuant to a loan, a Financing Lease or otherwise), provided that the principal amount of such Indebtedness (including any unused commitment) outstanding on shall at no time exceed 100% of the Closing Date listed on Schedule 10.1 to original acquisition, construction or completion cost, as the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)case may be, of such assets;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock of Significant Foreign Subsidiaries incurred by Holdings for working capital or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)operating purposes;
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in outstanding on the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insuranceEffective Date;
(f) Indebtedness arising from agreements of Holdings or a corporation which becomes a Restricted Subsidiary providing for indemnificationafter the Effective Date, adjustment of purchase price, earnout or similar obligations, provided that (i) such Indebtedness existed at the time such corporation became a Restricted Subsidiary and was not created in each case, incurred or assumed in connection with anticipation thereof and (ii) immediately after giving effect to the acquisition or disposition of any business, assets or a Subsidiary or other Person, other than guarantees of Indebtedness incurred such corporation by any Person acquiring all the Borrower or any portion other Restricted Subsidiary no Default or Event of such business, assets or a Subsidiary for the purpose of financing such acquisitionDefault shall have occurred and be continuing;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, interest rate and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, currency hedging transactions entered into in the ordinary course of business and not for speculative purposes;
(h) subject to subsection 8.9(g), Indebtedness of any Foreign Subsidiary to the Borrower or consistent with past practiceany Subsidiary;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to by this clause subsection 8.2 not exceeding (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, Borrower and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a all its Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired IndebtednessSubsidiaries), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any then outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not GuarantorsQualified Big Beaver Indebtedness, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence 500,000,000 in aggregate principal amount at any one time outstanding; and
(j) any refinancings, refundings, renewals or (y) Persons extensions of Indebtedness permitted hereunder, provided that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with if the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiaryprincipal amount of such Indebtedness is increased, such increased amount is permitted to be incurred under subsection 8.2(i); provided that after giving effect that, notwithstanding the foregoing, no Indebtedness of any Person shall be designated as "Permitted Pari Passu Senior Debt" and no Indebtedness created, incurred, assumed or suffered to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) Holdings would be permitted to incur at least $1.00 of additional Indebtedness exist pursuant to this subsection 8.2 shall constitute "Permitted Pari Passu Senior Debt" for purposes of the Fixed Charge Coverage Ratio test set forth in the first paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theTrust Agreement.
Appears in 1 contract
Sources: Credit Agreement (Kmart Corp)
Limitation on Indebtedness. Holdings will notThe Borrower shall not create, and will not incur, assume or suffer to exist, or permit any Restricted Subsidiary of its Subsidiaries to create, incur, issueassume or suffer to exist, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness except (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect subject to the incurrence final sentence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) this Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:7.02):
(a) the Loans, Letters of Credit and any other Indebtedness arising under the Credit Documentsthis Agreement or any other Loan Document;
(b) Indebtedness represented existing on the Effective Date and set forth in Schedule 7.02, and any extension, renewal, refunding and refinancing thereof, provided that after giving effect to such extension, renewal, refunding or refinancing, (A) the principal amount thereof is not increased, (B) neither the tenor nor the remaining average life thereof is reduced and (C) the interest rate thereon is not increased; provided, however, that the industrial revenue bonds identified by an asterisk in Schedule 7.02 may be refinanced at an interest rate higher than the Unsecured Asset Sale Bridge (including any guarantee thereof) rate in the aggregate amount not effect immediately prior to exceed €500,000,000such refinancing;
(c) (i) Indebtedness (including of the Borrower to any unused commitment) outstanding on of its Subsidiaries, of any wholly-owned Subsidiary of the Closing Date listed on Schedule 10.1 Borrower to the Disclosure Letter and (ii) intercompany Indebtedness (including Borrower or of any unused commitment) outstanding on wholly-owned Subsidiary of the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party Borrower to another Credit Party)Subsidiary of the Borrower;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, appeal bonds required in the ordinary course of business or in connection with the enforcement of rights or claims of the Borrower or its Subsidiaries or in connection with judgments that do not result in a Default or an Event of Default;
(e) trade debt (including Indebtedness for the purchase of farm products from contract growers and other similar suppliers but excluding Indebtedness for Borrowed Money) incurred by the Borrower or any of its Subsidiaries in the ordinary course of business in a manner and to an extent consistent with their past practicepractices and necessary or desirable for the prudent operation of its businesses;
(f) Indebtedness secured by Liens permitted pursuant to Section 7.01 subject to the limitations contained therein;
(g) Indebtedness incurred in connection with the issuance of commercial paper;
(h) Indebtedness under Hedging Agreements entered into in the ordinary course of business to hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct of its business; and
(i) other present and future unsecured Indebtedness provided at the time of, and immediately after giving effect to, the incurrence of such Indebtedness, Disqualified Stock and preferred stock no condition or event shall exist which constitutes an Event of Holdings or any Restricted Subsidiary Default. Notwithstanding anything contained in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed this Agreement to the capital of Holdings (in each casecontrary, other than Excluded Contributionsthe Borrower shall not create, any Cure Amount incur or proceeds of Disqualified Stock assume, or sales of Equity Interests to Holdings or permit any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) Subsidiaries to the extent such net cash proceeds create, incur or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investmentsassume, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments any Priority Debt (other than Permitted Investments specified in clauses (a) and (c) Priority Debt resulting from the securing of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated existing Indebtedness with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(iiExcess Margin Stock), does not at any one time if after giving effect to such creation, incurrence or assumption the aggregate outstanding exceed the greater amount of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) Priority Debt at the time of such creation, incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes assumption would exceed 15% of the first paragraph total consolidated assets (calculated as if the Merger had occurred as of this the Effective Date) of the Borrower and its Subsidiaries at the most recent fiscal quarter end of the Borrower for which financial statements have been delivered under Section 10.1 from and after the first date on which Holdings 6.09(a) or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) (or prior to the first delivery of such financial statements, at the respective dates of the most recent financial statements for the Borrower and IBP referred to in Section 4.05(a) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiumsb), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 1 contract
Sources: Credit Agreement (Tyson Foods Inc)
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising of the Borrower under this Agreement and the Credit other Loan Documents;
(b) unsecured Indebtedness represented by of any Subsidiary owing to the Unsecured Asset Sale Bridge (including Borrower or any guarantee thereof) in other Subsidiary or secured Indebtedness of any Subsidiary owing to the aggregate amount not to exceed €500,000,000Borrower;
(c) Indebtedness of the Borrower or any of its Subsidiaries incurred to finance its working capital (ior the working capital of any Subsidiary of the Borrower) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 in an aggregate principal amount not exceeding as to the Disclosure Letter and (ii) intercompany Indebtedness (including Borrower or any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)Subsidiary $1,000,000 at any time outstanding;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings of the Borrower or any Restricted Subsidiary, of its Subsidiaries incurred to finance the purchase, lease, construction, installation, maintenance, replacement its acquisition of fixed or improvement of property capital assets (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings a deferred purchase arrangement with a vendor, a loan, a Financing Lease or such Restricted Subsidiary, otherwise) in an aggregate principal amount which, when aggregated with not exceeding as to the principal amount of all Borrower or any Subsidiary (other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (xthan First Quadrant L.P.) $550,000,000 500,000, and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) as to First Quadrant L.P. $1,000,000, at the any time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)outstanding;
(e) Indebtedness incurred of a Person which becomes a Subsidiary after the date hereof; PROVIDED that (i) such indebtedness existed at the time such Person became a Subsidiary and was not created in anticipation thereof and (ii) immediately after giving effect to the acquisition of such Person by Holdings the Borrower no Default or any Restricted Subsidiary (including letter Event of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insuranceDefault shall have occurred and be continuing;
(f) Indebtedness arising from agreements in respect of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with (i) the acquisition or disposition of any business, assets or a Subsidiary or Subordinated Contingent Payment Notes and (ii) other Person, 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 acquisitionSubordinated Indebtedness;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another the Borrower or another Restricted Subsidiary) shall be deemedand its Subsidiaries existing on the date hereof, in each case to be an incurrence of such Indebtedness not permitted by this clauseas described on Schedule 7.2(g);
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such type described in clause (g) of the definition of Indebtedness owing to a Restricted Subsidiary that is not incurred by the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock Borrower or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, its Subsidiaries in the ordinary course of business or consistent with past practicereputable financial institutions and not for speculative purposes;
(i) Indebtedness, Disqualified Stock and preferred stock Indebtedness of Holdings the Borrower or any Restricted Subsidiary of its Subsidiaries incurred to the seller of an interest in any Management Company or Subsidiary; and
(j) Indebtedness in the nature of deferred compensation to employees in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed not exceeding as to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of Borrower and its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not Subsidiaries $5,000,000 at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 1 contract
Limitation on Indebtedness. Holdings will The Borrower shall not, and will shall not permit any Restricted Subsidiary to createGuarantor to, incur, issue, assume, guarantee create or otherwise become liablesuffer to exist any Financial Indebtedness, contingently or otherwise except for the following Financial Indebtedness (collectively, “incur” and collectively, an “incurrencePermitted Indebtedness”) with respect to any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is ):
(i) unsecured or the Obligations incurred hereunder;
(ii) is secured Affiliate Subordinated Debt;
(iii) Hedge Agreements entered into by assets that do the Borrower or any Guarantor in the ordinary course of business and not become Collateral, either (A) for speculative purposes and guarantees thereof by the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings Guarantors and the Restricted Subsidiaries Borrowers (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecuredas applicable), after giving effect provided that only Specified Hedge Agreements shall be entitled to the incurrence benefits of such the Security Documents;
(iv) unsecured Financial Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would that does not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding an aggregate principal amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) 5,000,000 at any one time outstanding. The foregoing limitations will not apply to:; or
(aA) Financial Indebtedness arising under of a Guarantor existing on the Credit Documents;
(b) date such entity becomes a Guarantor provided that such Financial Indebtedness represented was not incurred by such Guarantor in connection with the acquisition of such entity by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter Borrower or its Subsidiaries and (iiB) intercompany any Financial Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings such Guarantor to refinance, renew, replace, defease or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiaryrefund, in an aggregate principal amount whichwhole or in part, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock any Financial Indebtedness specified in clause (A) above and preferred stock then outstanding and any Financial Indebtedness incurred pursuant to this clause (dB) (plus accrued interest and all Refinancing Indebtedness incurred expenses related to refinance any other Indebtednesssuch financing renewal, Disqualified Stock and preferred stock incurred pursuant to this clause (dreplacement, defeasance or refunding), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (xor accrued value) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, that such Refinancing Indebtedness (1) has a weighted average life to maturity at the time such Refinancing Indebtedness is incurred which thereof is not less more than the remaining weighted average life to maturity principal amount of the Indebtedness, Disqualified Stock or preferred stock being such refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured renewed, replaced, defeased or secured by a Lien ranking junior to the Liens securing the Obligationsrefunded plus interest, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligationsfees, (ii) Disqualified Stock or preferred stockdiscounts, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, premiums and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtednessexpenses), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the. NY1:#3495514
Appears in 1 contract
Sources: Credit Agreement (Brookfield Infrastructure Partners L.P.)
Limitation on Indebtedness. Holdings The Parent Borrower will not, and will not permit any of the Restricted Subsidiary to Subsidiaries to, create, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) (w) Indebtedness arising under the Credit Documents (including any Indebtedness incurred pursuant to Section 2.14), (x) Indebtedness arising under any Permitted Receivables Financing in an aggregate principal amount not to exceed, together with Indebtedness arising under the Credit Documents, $4,500,000,000, (y) Indebtedness arising under the CF Facilities in an aggregate principal amount not to exceed at any time outstanding the sum of $4,000,000,000 and the portion of the Free and Clear Amount that the Parent Borrower has elected to apply to increase capacity under this clause (a)(y) to the extent such commitments and/or loans are not otherwise reduced or terminated and any modification, replacement, refinancing, refunding, renewal, defeasance or extension of any Indebtedness arising under the CF Facilities and any Indebtedness incurred to so modify, replace, refinance, refund, renew, defease or extend such Indebtedness and, except to the extent otherwise expressly permitted hereunder, the principal amount of any such modification, replacement, refinancing, refunding, renewal, defeasance or extension does not exceed the principal amount thereof outstanding immediately prior to such modification, replacement, refinancing, refunding, renewal or extension except by an amount equal to the unpaid accrued interest and premium thereon plus other reasonable amounts paid and fees and expenses incurred in connection with such modification, replacement, refinancing, refunding, renewal or extension; provided that the Parent Borrower, on behalf of the Borrowers, shall give the Administrative Agent prompt written notice of any increase in the aggregate amount committed in respect of the CF Facilities, and (z) intercompany Indebtedness of Restricted Subsidiaries, and any Guarantee Obligations in respect thereof, to allocate the Parent Borrower’s cost of borrowing to such Subsidiaries with respect to Indebtedness referred to in subclauses (w), (x) and (y) or in respect of Indebtedness incurred following the Amendment No. 1 Effective Date by the Parent Borrower;
(b) Subject to compliance with Section 10.5, Indebtedness represented by of the Unsecured Asset Sale Bridge (including Parent Borrower or any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 Restricted Subsidiary owed to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings Parent Borrower or any Restricted Subsidiary; provided that, in each case, all such Indebtedness of any Credit Party owed to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment any Person that is used or useful not a Credit Party shall be subordinated in a Similar Business, whether through the direct purchase right of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject payment to the foregoing limitation so long as the proceeds Obligations of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Credit Party on customary terms;
(eA) Indebtedness incurred by Holdings or in respect of any Restricted Subsidiary (including bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities and discounted bills of exchange or the discounting or factoring of receivables for credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued management purposes, in each case entered into or undertaken in the ordinary course of business), business (including (i) in respect of workers’ workers compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims, (ii) any bank guarantees, letters of credit or similar facilities by any Governmental Authority or to satisfy any governmental or regulatory requirements, (iii) any tenders, statutory obligations, surety and appeal bonds, bids, leases, governmental contracts, performance and return-of-money bonds and other similar obligations incurred in the ordinary course of business or consistent with past practices and (iv) Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance) and (B) Indebtedness supported by a letter of credit issued pursuant to credit facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(fd) subject to compliance with Section 10.5, Guarantee Obligations incurred by (i) Restricted Subsidiaries in respect of Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary Parent Borrower or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided Subsidiaries that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing is not prohibited to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness incurred under this Agreement (except to another the extent of any express restriction on Guarantee Obligations relating to such Indebtedness provided for herein) and (ii) the Parent Borrower or another in respect of Indebtedness of Restricted SubsidiarySubsidiaries that is not prohibited to be incurred under this Agreement; provided that, except as provided in clauses (j) and (k) below, there shall be deemed, in each case to be an incurrence of such Indebtedness not permitted no guarantee by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer Subsidiary Borrower of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausea Credit Party;
(e) Guarantee Obligations (i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, incurred in the ordinary course of business in respect of obligations of (or consistent with past practiceto) suppliers, customers, franchisees, lessors and licensees or (ii) otherwise constituting Investments permitted by Sections 10.5(e), 10.5(g), 10.5(i), 10.5(q), or 10.5(y);
(f) (i) Indebtedness, Disqualified Stock Indebtedness (including Indebtedness arising under Capital Leases and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereofpurchase money indebtedness) up to 100% incurred within one year of the net cash proceeds received by Holdings since immediately after acquisition, purchase, construction, repair, replacement, expansion or improvement of fixed or capital assets to finance the Closing Date from acquisition, purchase, construction, repair, replacement, expansion or improvement of such fixed or capital assets (whether through the issue direct purchase of assets or sale the Stock of Equity Interests of Holdings or cash contributed to the capital of Holdings any Person owning such assets), (ii) Indebtedness arising under Capital Leases entered into in each caseconnection with Permitted Sale Leasebacks and (iii) Indebtedness arising under Capital Leases, other than Excluded Contributions(x) Capital Leases in effect on or prior to September 30, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries2022 and (y) as determined Capital Leases entered into after September 30, 2022 and in accordance with Sections 10.5(a)(iii)(B) effect on the Amendment No. 1 Effective Date and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied set forth on Schedule 10.1 and Capital Leases entered into pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments subclauses (other than Permitted Investments specified in clauses (a) and (c) of the definition thereofi) and (ii) Indebtedness, Disqualified Stock or preferred stock above; provided that the aggregate amount of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and Indebtedness incurred pursuant to this clause subclause (l)(ii), does not iii) at any one time outstanding shall not exceed the greater of (x) $825,000,000 500,000,000 and (y) 75.05% of Consolidated EBITDA for the most recently ended recent Test Period for which Section 9.1 Financials have been delivered, and (calculated on a Pro Forma Basisiv) at any modification, replacement, refinancing, refunding, renewal or extension of any Indebtedness specified in subclause (i), (ii) or (iii) above and any Indebtedness incurred to so modify, replace, refinance, refund, renew, defease or extend such Indebtedness; provided that, except to the time extent otherwise expressly permitted hereunder, the principal amount of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock Indebtedness incurred pursuant to this subclause (iv) does not exceed the principal amount thereof outstanding immediately prior to such modification, replacement, refinancing, refunding, renewal or extension (and with respect to a modification, replacement, refinancing, refunding, renewal, defeasance or extension of Indebtedness under clause (l)(iiiii), the amount specified therein) shall cease except by an amount equal to be deemed the unpaid accrued interest and premium thereon plus other reasonable amounts paid and fees and expenses incurred in connection with such modification, replacement, refinancing, refunding, renewal or outstanding for purposes extension;
(i) other than Indebtedness described in subclause (ii) of this clause (l)(iig), Indebtedness (including any unused commitment) (x) outstanding on or prior to September 30, 2022 and (y) incurred after September 30, 2022 and outstanding on the Amendment No. 1 Effective Date and set forth on Schedule 10.1, (ii) Indebtedness existing on the Amendment No. 1 Effective Date and owed by the Parent Borrower or any Restricted Subsidiary to the Parent Borrower or any Restricted Subsidiary, and any Guarantee Obligations in respect thereof, but shall be deemed incurred only for so long as such Indebtedness or any refinancing, refunding or renewal thereof permitted by this subclause (ii) is held by the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or Parent Borrower, such Restricted Subsidiary could have or a Credit Party and, in the case of each of the preceding subclauses (i) and (ii), any modification, replacement, refinancing, refunding, renewal, defeasance or extension thereof (including any unused commitment) and any Indebtedness incurred to so modify, replace, refinance, refund, renew, defease or extend such Indebtedness (or, in the case of subclause (ii) only, any intercompany transfer of creditor positions in respect thereof pursuant to intercompany debt restructurings); provided that all such Indebtedness arising as a result of any such transfer of creditor positions as contemplated by subclause (ii) of any Credit Party owed to any Person that is not a Credit Party shall be subordinated to the Obligations of such Credit Party on customary terms; provided further that except to the extent otherwise expressly permitted hereunder, in the case of any such modification, replacement, refinancing, refunding, renewal, defeasance or extension (but not any such transfer of creditor positions), (x) the original aggregate principal amount thereof does not exceed the aggregate principal amount thereof outstanding immediately prior to such modification, replacement, refinancing, refunding, renewal, defeasance or extension except by an amount equal to any accrued interest and premium thereon plus other reasonable amounts paid and fees and expenses incurred in connection with such modification, replacement, refinancing, refunding, renewal. defeasance or extension, or paid in respect of such Indebtedness, Disqualified Stock (y) the direct and contingent obligors with respect to such Indebtedness are not changed (except that any Credit Party may also be made an obligor thereunder), and (z) except in the case of a refinancing of Indebtedness pursuant to subclause (ii), or preferred stock under any customary bridge facility so long as the first paragraph long-term debt into which such customary bridge facility is to be converted satisfies the provisions of this Section 10.1 without reliance on this clause (l)(iiz), either (I) such Indebtedness has the same or later final maturity than the Indebtedness being refinanced (except to the extent of nominal amortization) or (II) no portion of such refinancing Indebtedness matures prior to the Final Maturity Date (determined as of the date such Indebtedness is incurred);
(mh) the incurrence or issuance by Holdings or any Restricted Subsidiary Indebtedness in respect of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances Hedge Agreements;
(i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence Credit Parties in an aggregate principal amount at any one time outstandingoutstanding not to exceed $2,000,000,000;
(1) Indebtedness of a Person or Indebtedness attaching to assets of a Person that, in either case, becomes a Restricted Subsidiary (or (yis a Restricted Subsidiary that survives a merger with such Person) Persons or Indebtedness attaching to assets that are acquired by Holdings the Parent Borrower or any Restricted Subsidiary Subsidiary, in each case after the Closing Date as the result of a Permitted Acquisition or merged into or consolidated with Holdings or Investment not prohibited hereby; provided that (w) such Indebtedness existed at the time such Person became a Restricted Subsidiary or at the time such assets were acquired and, in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisitioneach case, merger, consolidation or designation described was not created in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theanticipation thereof;
Appears in 1 contract
Limitation on Indebtedness. Holdings will notThe Borrower shall not create, incur, assume or suffer to exist any Indebtedness, and will shall not permit any Restricted Subsidiary of its Subsidiaries to create, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept for:
(a) Indebtedness arising created hereunder and under the Credit DocumentsNotes;
(b) Indebtedness represented of the Borrower or any of its Subsidiaries (not referred to in any other clause of this Section 6.2) secured by Liens permitted with respect to the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000Borrower or its Subsidiaries by Section 6.3;
(c) (i) Indebtedness (including any unused commitment) outstanding under the Existing Credit Agreement in an aggregate principal amount not exceeding $351,100,000, LESS the principal amount of mandatory repayments and prepayments made thereunder from time to time on and after the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)Date;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)[Intentionally Omitted];
(e) Indebtedness incurred of a Person which becomes a Subsidiary after the date hereof, provided that (i) such Indebtedness existed at the time such Person became a Subsidiary and was not created in anticipation thereof and (ii) immediately after giving effect to the acquisition of such Person by Holdings the Borrower or any Restricted existing Subsidiary no Default shall have occurred and be continuing;
(including letter f) unsecured Indebtedness of credit obligations consistent with past practice constituting reimbursement obligations with respect any Subsidiary owing to the Borrower or any other Subsidiary or secured Indebtedness of any Subsidiary owing to the Borrower or any Subsidiary;
(g) the License Fee Guaranties; and the Junior Subordinated Notes, in amounts in existence on the Closing Date;
(h) Indebtedness (i) under any Interest Rate Agreement required by the Existing Credit Agreement, (ii) evidenced by performance bonds or letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance business or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect thereof, (iii) evidenced by a letter of selfcredit facility related to insurance associated with claims for work-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings related injuries or any Restricted Subsidiary or obligations in respect of letters of credit, (iv) for bank guarantees or similar instruments related thereto, in each case, overdrafts incurred in the ordinary course of business or consistent with past practicethat are promptly repaid;
(i) Indebtednesstrade credit incurred to acquire goods, Disqualified Stock supplies, services and preferred stock incurred in the ordinary and normal course of Holdings or any Restricted Subsidiary business;
(j) Capitalized Lease Obligations in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) exceeding $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));50,000,000; and
(mk) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as all deferred taxes (where such deferral is otherwise permitted under the first paragraph terms of this Section 10.1 Agreement and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiumsunder applicable law), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 1 contract
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising of the Borrower or any Subsidiary under the Credit Documentsthis Agreement or any other Loan Document;
(b) existing Indebtedness represented by of the Unsecured Asset Sale Bridge (including Borrower and its Subsidiaries listed on Schedule 8.2 and any guarantee Refinancing Indebtedness in respect thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including of the Borrower to any unused commitment) outstanding on Subsidiary of the Closing Date listed on Schedule 10.1 Borrower and of any Domestic Subsidiary to the Disclosure Letter and (ii) intercompany Indebtedness (including Borrower or to any unused commitment) outstanding on other Subsidiary of the Closing Date listed on Schedule 10.1 Borrower, provided that such indebtedness is evidenced by a promissory note that is pledged to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)Administrative Agent in accordance with the Guarantee and Collateral Agreement;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock under sale and preferred stock incurred leaseback transactions permitted by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)subsection 8.12;
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect the Borrower under Hedge Agreements entered into solely to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurancehedge interest rate exposure and not for speculative purposes;
(f) Indebtedness arising from agreements of Holdings the Borrower or a Restricted any Subsidiary providing for indemnificationincurred to finance the acquisition, adjustment construction or improvement of purchase priceany fixed or capital assets, earnout or similar obligations, in each case, incurred or including obligations under Financing Leases and any Indebtedness assumed in connection with the acquisition or disposition of any business, such assets or secured by a Subsidiary Lien on any such assets prior to the acquisition thereof which Lien was not created in contemplation of such acquisition and on any extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided that (A) such Indebtedness is incurred prior to or other Person, other than guarantees within 120 days (150 days in the case of the ▇▇▇▇▇ Township Facility) after such acquisition or the completion of such construction or improvement and (B) the aggregate principal amount of Indebtedness incurred permitted by this paragraph (f), and the aggregate amount of sale-leaseback transactions permitted under subsection 8.12 theretofore consummated, shall not exceed $25,000,000 at any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisitiontime outstanding;
(g) Indebtedness of Holdings to any Person that becomes a Restricted SubsidiarySubsidiary after the date hereof; 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 (A) such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (except to another Borrower or another Restricted SubsidiaryB) shall be deemed, in each case to be an incurrence the aggregate principal amount of such Indebtedness not permitted by this clauseparagraph (g) shall not exceed $5,000,000 at any time outstanding;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemedForeign Subsidiaries, in each case addition to be an incurrence of such Indebtedness not permitted by this clauseparagraph (i), in an aggregate amount not in excess of $5,000,000 at any time outstanding;
(i) shares Indebtedness of preferred stock of a Restricted any Foreign Subsidiary issued to Holdings the Borrower or another Restricted any other Subsidiary; provided that (A) the aggregate principal amount of Indebtedness of Holland & ▇▇▇▇▇▇▇ to the Borrower and the Domestic Subsidiaries, taken together with guarantees of obligations of Holland & ▇▇▇▇▇▇▇ permitted under subsection 8.4(g) and investments in Holland & ▇▇▇▇▇▇▇ permitted under subsection 8.9(d), shall not exceed $25,000,000 at any subsequent issuance or transfer time outstanding, and (B) the aggregate principal amount of Indebtedness of Foreign Subsidiaries other than Holland & ▇▇▇▇▇▇▇ to the Borrower and the Domestic Subsidiaries, taken together with guarantees of obligations of Foreign Subsidiaries other than Holland & ▇▇▇▇▇▇▇ permitted under subsection 8.4(f) and investments in Foreign Subsidiaries other than Holland & ▇▇▇▇▇▇▇ permitted under subsection 8.9(d), shall not exceed $10,000,000 at any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clausetime outstanding;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);Refinancing Indebtedness incurred in order to refinance in whole or in part the Obligations; and
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary other unsecured Indebtedness in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not exceed $20,000,000 at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 1 contract
Sources: Credit Agreement (Nbty Inc)
Limitation on Indebtedness. Holdings None of the Group Companies will notincur, and will not permit any Restricted Subsidiary to create, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect permit to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toSwap Obligations except:
(a) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) of the Borrower and its Subsidiaries outstanding on the Closing Date listed and disclosed on Schedule 10.1 to 7.01 (collectively, the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party“Existing Indebtedness”);
(dii) Indebtedness of the Loan Parties under this Agreement and the other Loan Documents, including any Incremental Loans incurred pursuant to Section 2.15 and Extended Term Loans and Extended Revolving Loans incurred pursuant to Section 2.16;
(including Capitalized iii) Purchase Money Indebtedness, Attributable Indebtedness in respect of Capital Leases and Synthetic Lease Obligations)Obligations of the Borrower and its Subsidiaries, Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance Indebtedness financing the purchase, leaseacquisition, construction, installation, maintenancerepair, replacement or improvement of capital assets, in each case incurred after the Closing Date and Attributable Indebtedness in respect of Sale/Leaseback Transactions of the Borrower and its Subsidiaries permitted pursuant to Section 7.12; provided that (x) the aggregate amount of all such Indebtedness incurred pursuant to this clause (iii) does not exceed $5,000,000 at any time outstanding and (y) no Lien securing any such Indebtedness shall extend to or cover any property or asset of any Group Company other than the asset so financed (real and accessions thereto) and proceeds and products thereof (provided that individual financings of equipment provided by any lender may be cross-collateralized to other financings of equipment provided by such lender);
(iv) (A) Indebtedness of the Borrower or personalits Subsidiaries secured solely by Liens granted pursuant to clauses (xvi), (xvii) and/or (xviii) of Section 7.02 and any other Indebtedness of a Person whose Equity Interests or equipment that is used or useful assets are acquired in a Similar BusinessBusiness Acquisition which is assumed by the Borrower or a Subsidiary of the Borrower in such Business Acquisition; provided that such Indebtedness was not incurred in connection with, whether through or in anticipation of, the direct purchase events described in such clauses or such Business Acquisition, and (B) so long as no Default or Event of assets Default is continuing at the time of, or would result from, the Capital Stock incurrence of such Indebtedness, Indebtedness incurred to finance a Business Acquisition, provided that (a) the aggregate amount of all Indebtedness incurred pursuant to this clause (iv) does not exceed $10,000,000 at any time outstanding, (b) the aggregate outstanding principal amount of Indebtedness of any Person owning such assets Group Companies that are not Loan Parties in reliance on this clause (iv), together with Indebtedness of any Group Companies that are not Loan Parties in reliance upon clauses (xvii) below, shall not exceed $10,000,000 in aggregate principal amount outstanding and (c) solely with respect to clause (B) above, the final maturity of Indebtedness arising from incurred under this clause (iv) is equal to or later than the conversion Maturity Date applicable to the Initial Term Loans (and in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to the initial Maturity Date of the obligations of Holdings or any Restricted Subsidiary Revolving Facility);
(v) unsecured Indebtedness under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiarythe Target Subordinated Convertible Notes, in an aggregate principal amount whichnot to exceed $50,000;
(vi) any Permitted Refinancing of Indebtedness permitted under clause (i), when aggregated with the principal amount (iii) or (iv) above (but without duplication of all other Indebtedness, Disqualified Stock and preferred stock then amounts outstanding and incurred pursuant to this clause such clauses);
(dvii) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed of the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings Borrower or any Restricted Subsidiary pursuant of the Subsidiaries that may be deemed to this clause exist (dincluding, without duplication, any contingent liabilities in respect thereof) in connection with a Permitted Sale Leaseback agreements providing for indemnification, purchase price adjustments, earn-out, “milestone”, non- compete, consulting, deferred compensation and similar obligations in connection with acquisitions or sales of assets and/or businesses permitted under this Agreement;
(viii) Swap Obligations of the Borrower or any of its Subsidiaries under Swap Agreements to the extent entered into in order to manage interest rate, foreign currency exchange rate and commodity pricing risks and not for speculative purposes;
(ix) Indebtedness owed to any Person providing property, casualty or liability insurance to the Borrower or any Subsidiary of the Borrower, so long as such Indebtedness shall not be subject in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance for the annual period (plus additional fees and costs imposed by virtue of being paid in installments) in which such Indebtedness is incurred and such Indebtedness shall be outstanding only during such year;
(x) Indebtedness consisting of Guaranty Obligations incurred (A) by the Borrower in respect of Indebtedness, leases or other ordinary course obligations not prohibited to be incurred by, or obligations in respect of Permitted Acquisitions, other Investments permitted by Section 7.06 or Permitted Joint Ventures of, any Subsidiary Guarantor, (B) by any Subsidiary Guarantor in respect of Indebtedness, leases or other ordinary course obligations not prohibited to be incurred by, or obligations in respect of Investments permitted by Section 7.06 or Permitted Joint Ventures of, the Borrower or any other Subsidiary Guarantor, (C) by any Subsidiary of the Borrower that is not a Loan Party in respect of the Indebtedness, leases or other ordinary course obligations not prohibited to be incurred by, or obligations in respect of Permitted Acquisitions, other Investments permitted by Section 7.06 or Permitted Joint Ventures of, the Borrower or any other Subsidiary of the Borrower; and (D) by any Loan Party in respect of Indebtedness, leases or other ordinary course obligations not prohibited to be incurred by, or obligations in respect of Permitted Acquisitions, other Investments permitted by Section 7.06 or Permitted Joint Ventures of, any Subsidiary that is not a Loan Party, in each case, to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with extent constituting an Investment permitted pursuant to Section 5.2(a7.06 (other than Section 7.06(a)(viii);
(exi) intercompany Indebtedness to the extent permitted by Section 7.06(a)(viii);
(A) Indebtedness incurred of the Borrower and its Subsidiaries arising from the honoring by Holdings a bank or any Restricted Subsidiary other financial institution of a check, draft or similar instrument drawn against insufficient funds in the Ordinary Course of Business; provided that (including letter 1) such Indebtedness (other than credit or purchase cards) is extinguished within five (5) Business Days after receipt of notice of its incurrence and (2) such Indebtedness in respect of credit or purchase cards is extinguished within sixty (60) days from its incurrence, and (B) obligations consistent of the Borrower and its Subsidiaries to financial institutions, in each case to the extent in the Ordinary Course of Business and on terms and conditions which are within the general parameters customary in the banking industry, in connection with past practice constituting reimbursement Cash Management Services or incurred as a result of endorsement of negotiable instruments for deposit or collection purposes;
(xiii) unsecured subordinated Indebtedness of the Borrower at any time outstanding owing to any then existing or former director, officer, employee, independent contractor, manager or consultant of the Borrower or its Subsidiaries (or their estates, spouses or former spouses, other immediate family members, successors, executors, administrators, heirs, legatees or distributees of any of the foregoing) for the repurchase, redemption or other acquisition or retirement for value of any Equity Interest or Equity Equivalent of the Borrower held by them to the extent such repurchase, redemption or other acquisition or retirement for value is permitted by Section 7.07, in an aggregate principal amount not to exceed $2,500,000 at any time outstanding;
(xiv) contingent obligations under or in respect of (A) surety bonds, appeal bonds, performance and return-of-money bonds, workers’ compensation claims, self-insurance obligations, bankers’ acceptances and letters of credit or (B) guarantees or obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or and other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in the Ordinary Course of Business in connection with the acquisition or disposition of any businessbids, assets or a Subsidiary or projects, licenses, leases and other Person, 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 acquisitioncommercial contracts;
(gxv) Indebtedness representing deferred compensation, severance, pension and health and welfare retirement benefits or the equivalent thereof to current and former employees of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer the Borrower and its respective Subsidiaries incurred in the Ordinary Course of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clauseBusiness;
(hxvi) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary Unsecured Notes in an aggregate principal amount or liquidation preference (together with not to exceed $275,000,000, and any Permitted Refinancing Indebtedness in respect (but without duplication of amounts outstanding under such Unsecured Notes) thereof;
(xvii) up unsecured Indebtedness incurred by Group Companies in an aggregate outstanding amount not to 100% exceed $25,000,000 so long as, both before and after giving effect to the incurrence thereof,(A) no Default or Event of Default shall have occurred and be continuing, (B) the Total Leverage Ratio, determined on a Pro Forma Basis shall not be greater than 6.00:1.00 (excluding, for purposes of such calculation, proceeds from such incurrence of Indebtedness from any Unrestricted Cash and Cash Equivalents permitted to be netted in the calculation of such ratio), (C) such Indebtedness shall have a final maturity date occurring more than ninety-one (91) days following the Latest Maturity Date then in effect, (D) the Weighted Average Life to Maturity of such Indebtedness shall be no shorter than the Weighted Average Life to Maturity of any Class of Term Loans outstanding at the time of incurrence of such Indebtedness, (E) none of the net cash proceeds received by Holdings since immediately Borrower’s Subsidiaries is a borrower or guarantor with respect to any such Indebtedness unless (x) such guaranty is on an unsecured basis and (y) such Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently Guaranteed the Borrower’s Senior Credit Obligations hereunder and (F) such Indebtedness shall not require any mandatory repayment, redemption, repurchase or defeasance (other than customary change of control, asset sale, fundamental change, event or casualty or condemnation event offers, customary acceleration any time after the Closing Date from the issue or sale an event of default and customary conversion rights into Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments Borrower (other than Permitted Investments specified in clauses Disqualified Capital Stock)); provided that the aggregate outstanding principal amount of such unsecured Indebtedness of Group Companies that are not Loan Parties shall not exceed $10,000,000;
(axviii) and (c) Indebtedness of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder Foreign Subsidiaries in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then not to exceed $25,000,000 outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii))time;
(mxix) the incurrence or issuance Indebtedness not otherwise permitted by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses 7.01 incurred after the Closing Date in an aggregate principal amount not to exceed $10,000,000 outstanding at any time; and
(bxx) and (c) aboveall premiums, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums interest (including reasonable tender premiumspost-petition interest), defeasance costs fees, expenses, charges and fees additional or contingent interest on obligations described in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances clauses (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, through (iixix) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theabove.
Appears in 1 contract
Sources: Credit Agreement (Teladoc, Inc.)
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising in respect of the loans, the notes and other obligations of the Guarantors under the Corporate Credit DocumentsAgreement and the other Loan Documents as defined in the Corporate Credit Agreement;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including of HCC to any guarantee thereof) in the aggregate amount not of its Subsidiaries and of any such Subsidiary which is a Guarantor to exceed €500,000,000HCC or any other Subsidiary of HCC;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Initial Closing Date and listed on Schedule 10.1 to the Disclosure Letter 11.2 and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)all extensions, renewals, replacements, refinancings and modifications thereof permitted hereunder;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings of HCC or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, its Subsidiaries in an aggregate principal amount which, when aggregated with not to exceed $10,000,000 at any time outstanding which is recourse only to the principal amount assets of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings HCC or any Restricted Subsidiary pursuant to this clause (d) in connection Subsidiaries acquired or financed with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Indebtedness;
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claimsFinancing Leases provided that, deferred compensationafter giving effect thereto, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insuranceSection 11.7 is not contravened;
(f) Indebtedness arising from agreements in respect of Holdings or a Restricted Subsidiary providing for indemnificationSubordinated Debt, adjustment the terms and conditions of purchase pricewhich have been approved in writing by the Required Lenders and all extensions, earnout or similar obligationsrenewals, in each casereplacements, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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 acquisitionrefinancings and modifications thereof permitted hereunder;
(g) Indebtedness of Holdings to a Restricted SubsidiaryUnqualified Subsidiaries of HCC; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clauseis Non-Recourse Indebtedness;
(h) Indebtedness of a Restricted Person which becomes a Subsidiary owing after the date hereof in an aggregate principal amount not exceeding as to Holdings or another Restricted Subsidiary; HCC and its Subsidiaries $10,000,000 at any time outstanding, provided that if that
(i) such indebtedness existed at the Borrowers or time such Person became a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is and was not the Borrowers or a Guarantor, such Indebtedness is subordinated created in right of payment anticipation thereof and immediately after giving effect to the Guarantee acquisition of such Guarantor as the case may be; provided, further, that Person by HCC or any subsequent transfer of any such Indebtedness (except to Holdings its Subsidiaries no Default or another Restricted Subsidiary) Event of Default shall have occurred and be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausecontinuing;
(i) shares Indebtedness in respect of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiarythe Tranche A Loans and the Other Equipment Lease Tranche A Loans; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;and
(j) Hedging Obligations Indebtedness not contemplated by clauses (excluding Hedging Obligations entered into for speculative purposes);
(ka)-(i) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, above not exceeding $5,000,000 in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 1 contract
Sources: Guarantee (Hanover Compressor Co)
Limitation on Indebtedness. Holdings will not, and will Borrower shall not permit any Restricted Subsidiary to create, incur, issue, assume, guarantee suffer to exist, or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) remain directly or indirectly liable with respect to any Indebtedness, except:
(a) Indebtedness incurred pursuant to the Loan Documents,
(including Acquired Indebtednessb) Indebtedness scheduled on Schedule 7.05 and Holdings will to the extent any such Indebtedness is a Capital Lease, extensions, renewals and replacements thereof that do not issue any shares increase the outstanding principal amount thereof;
(c) Indebtedness consisting of Disqualified Stock Contingent Obligations permitted pursuant to Section 7.09;
(d) current liabilities, taxes and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, assessments incurred in the case ordinary course of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, business;
(e) Indebtedness in favor of third parties (i) on terms and conditions first offered to the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stockLender which the Lender has declined to provide to Borrower, (1ii) if the Lender has consented to such Indebtedness from such third party lender, which consent shall not be unreasonably withheld, (iii) at the time of incurring such Indebtedness, Disqualified Stock no Default shall exist or shares of preferred stock is secured by a Lien on would result from the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes incurrence of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), Indebtedness after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00when included with Borrower's existing Indebtedness, (2iv) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien Indebtedness does not have any scheduled amortization prior to two years after the Termination Date and (v) such Indebtedness shall be subject to an intercreditor agreement between the Lender and any such third party lender on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings terms and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis conditions reasonably satisfactory to the Liens on Lender ("Alternative Financings"). For the Collateral securing avoidance of doubt, Borrower may obtain Indebtedness in favor of third parties to prepay the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together Loan Documents without first offering such Indebtedness to the Lender;
(f) Indebtedness incurred pursuant to that certain promissory note of even date herewith in favor of Tauren in the original principal amount of $1,300,000.00 (the "Purchase Note"), executed in connection with the Asset Purchase Agreement, provided however, Borrower shall not pay any amounts incurred amount owing under such note with funds other than (i) funds made available to Borrower by Lender pursuant to the option contemplated under Section 10.1(n)(x) or 2.01, (ii) funds made available to Borrower by equity investments in Borrower arranged by Lender, or (iii) Dispositions permitted pursuant to Section 7.02(f);
(g) in the event (i) the sixty (60) day option set forth in Section 1.1 of the Asset Purchase Agreement is exercised by Cubic and the transactions contemplated thereby are consummated by Cubic and Tauren, and (ii) all amounts owing in connection with the note referenced in clause (cf) above have been paid in full, Indebtedness incurred pursuant to a note to be executed in favor of Tauren in the original principal amount of $1,500,000.00, in the form of Exhibit __ to the Asset Purchase Agreement, provided such Indebtedness is at all time subject to the terms and conditions of the definition of Permitted Other Subordination Agreement; and
(h) Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed other than as described under the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
preceding clauses (a) Indebtedness arising under the Credit Documents;
- (b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereofg) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the25,000.
Appears in 1 contract
Sources: Credit Agreement (Cubic Energy Inc)
Limitation on Indebtedness. Holdings will The Borrower shall not, and will shall not permit any Restricted Subsidiary to createof its Subsidiaries to, incur, issue, assume, guarantee incur or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) at any time be liable with respect to any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising under the Credit Documentsthis Agreement and Guaranty Obligations in respect thereto;
(bi) Purchase money Indebtedness represented by the Unsecured Asset Sale Bridge (including in an aggregate principal amount at any guarantee thereof) in the aggregate amount time outstanding not to exceed €500,000,000$25,000,000 incurred or assumed for the purpose of financing all or any part of the cost of acquiring, constructing or improving fixed assets and (ii) Indebtedness existing at the time a Person is merged or consolidated with or into the Borrower or a Subsidiary, or at the time such Person becomes a Subsidiary or at the time such asset is acquired, so long as the principal amount of Indebtedness under this clause (ii) does not exceed $25,000,000 at any time outstanding and was not incurred in contemplation of such merger, consolidation or asset acquisition, and any subsequent extensions, renewals or replacements thereof so long as the principal amount thereof is not increased above the amount outstanding immediately prior thereto (except for the amount of any premium required to be paid pursuant to the terms of such Indebtedness, plus expenses reasonably incurred by the issuer of such Indebtedness, in connection with such extension, renewal or replacement);
(c) (i) Indebtedness (including any unused commitment) outstanding on of the Closing Date listed on Schedule 10.1 Borrower owed to a Guarantor, or Indebtedness of a Guarantor owed to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to Borrower or another Credit Party)Guarantor;
(d) Indebtedness of Foreign Subsidiaries (including Capitalized Lease Obligations)i) existing on the Effective Date and set forth on Schedule 6.2(d) plus any subsequent extensions, Disqualified Stock renewals or replacements thereof; provided, however, that, after giving effect to any extensions, renewals or replacements, Indebtedness permitted pursuant to this Section 6.2(d) (Limitations on Indebtedness) does not exceed the respective amount listed on Schedule 6.2(d) as of the Effective Date; and preferred stock incurred by Holdings or any Restricted Subsidiary, (ii) other Indebtedness of Foreign Subsidiaries owed to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the not to exceed an aggregate principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)10,000,000;
(e) Indebtedness of the Borrower and its Subsidiaries not otherwise permitted by this Section 6.2 (Limitation on Indebtedness) incurred by Holdings or after the Effective Date in an aggregate principal amount at any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect time outstanding not to letters of credit issued in exceed $10,000,000; provided, however, that the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, other than guarantees aggregate principal amount of Indebtedness incurred by all Loan Parties pursuant to this clause (e) shall not exceed $5,000,000 at any Person acquiring all time outstanding;
(i) Guaranty Obligations of the Borrower or any portion Guarantor of such business, assets Indebtedness of the Borrower or any other Guarantor permitted by this Section 6.2 and (ii) Guaranty Obligations of any Subsidiary that is not a Subsidiary for Guarantor of Indebtedness of the purpose Borrower or any of financing such acquisitionits Subsidiaries permitted by this Section 6.2;
(g) Indebtedness of Holdings a Foreign Subsidiary owed to a Restricted Subsidiary; provided that Foreign Subsidiary and Indebtedness of a Loan Party to a Foreign Subsidiary at any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausetime outstanding;
(h) Indebtedness (other than Indebtedness described in clauses (j) and (l) below) outstanding as of a Restricted Subsidiary owing to Holdings the Effective Date and listed on Schedule 6.2(h), plus any subsequent extensions, renewals or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may bereplacements thereof; provided, furtherhowever, that that, after giving effect to any subsequent transfer extensions, renewals or replacements, Indebtedness permitted pursuant to this Section 6.2(h) (Limitations on Indebtedness) does not exceed the respective amount listed on Schedule 6.2(h) as of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausethe Effective Date;
(i) shares Indebtedness consisting of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, performance and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, guaranties incurred (i) in the ordinary course of business not to exceed $500,000 in aggregate amount at any time outstanding and (ii) in connection with the appeal of judgments or consistent with past practiceorders rendered against the Borrower or any of its Subsidiaries not to exceed $7,500,000 in aggregate amount at any time outstanding;
(ij) IndebtednessIndebtedness of the Borrower incurred under the Existing Senior Secured Notes and the other Existing Senior Secured Note Documents in an aggregate outstanding principal amount not to exceed $275,000,000, Disqualified Stock and preferred stock Permitted Refinancings thereof;
(k) Indebtedness of Holdings or the Borrower incurred under the Existing Subordinated Notes and the other Existing Subordinated Note Documents in an aggregate outstanding principal amount not to exceed $11,520,000;
(l) Indebtedness of the Borrower incurred under the New Senior Secured Notes and the other New Senior Secured Note Documents in an aggregate outstanding principal amount not to exceed $150,000,000, and Permitted Refinancings thereof;
(m) Indebtedness with respect to any Restricted Subsidiary Backstop Facility, which indebtedness shall be unsecured and shall not exceed a maximum aggregate principal amount set forth in the Consent Fee Letter;
(n) Indebtedness incurred by Foreign Subsidiaries under any asset based revolving credit facility in an aggregate outstanding principal amount not to exceed $30,000,000 (which amount shall be reduced dollar-for-dollar by the amount of any Permitted Factoring Agreements outstanding);
(o) Indebtedness of the Borrower with respect to the European Intercompany Loan; and
(p) Indebtedness in respect of the Junior Lien Credit Agreement in an aggregate principal amount or liquidation preference not to exceed $15,000,000 (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred increased by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary capitalizing paid-in-kind interest in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiaryof the Junior Lien Credit Agreement); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 1 contract
Sources: Credit Agreement (Tekni Plex Inc)
Limitation on Indebtedness. Holdings will The Borrower shall not, and will shall not permit any Restricted Subsidiary to of its Subsidiaries to, create, incur, issue, assume, guarantee suffer to exist, or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) remain directly or indirectly liable with respect to to, any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising under the Credit Documentsincurred pursuant to this Agreement;
(b) Indebtedness represented by of the Unsecured Asset Sale Bridge Borrower, Fidelity Information Services, Inc. and Fidelity National Information Solutions, Inc. consisting of guarantees of the Parent Credit Facility until the consummation of the IPO and (including any guarantee thereofii) other Indebtedness consisting of other Contingent Obligations in the respect of obligations of other Persons in an aggregate amount not to exceed €500,000,000;at any one time outstanding 3% of Net Worth.
(c) (i) Indebtedness (including any unused commitment) outstanding existing on the Closing Date listed and identified on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)7.04;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Purchase money Indebtedness, Disqualified Stock Capital Leases, Off-Balance Sheet Liabilities and/or indebtedness, liabilities and preferred stock then outstanding and obligations incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback trade receivables securitization transaction involving the Borrower or any of its Subsidiaries and a Securitization Vehicle (regardless of whether such indebtedness, liabilities and obligations constitute Off-Balance Sheet Liabilities), provided that (i) the aggregate amount of such Indebtedness at any time outstanding shall not be subject exceed 10% of Net Worth, (ii) such Indebtedness when incurred shall not exceed 100% of the cost or fair market value, whichever is lower, of the property being acquired on the date of acquisition, (iii) such Indebtedness is created and any Lien attaches to such property concurrently with or within forty-five (45) days of the foregoing limitation so long as acquisition thereof, and (iv) such Lien does not at any time encumber any property other than the proceeds of property financed by such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Indebtedness;
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insuranceObligations under Swap Contracts entered into for hedging purposes;
(f) Indebtedness arising of the Borrower and its Subsidiaries having a maturity of 92 days or less representing borrowings from agreements of Holdings a bank or banks with which the Borrower or such Subsidiary has a Restricted depository relationship, which borrowings shall be fully secured by Cash Equivalents purchased by the Borrower or such Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion proceeds of such business, assets or a Subsidiary for the purpose of financing such acquisitionborrowings;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, incurred in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to with "1031 exchange" or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or relocation service transactions and secured by a Lien ranking junior to the Liens securing properties which are the Obligations, subject of such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantortransactions;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the
Appears in 1 contract
Sources: Credit Agreement (Fidelity National Financial Inc /De/)
Limitation on Indebtedness. Holdings will (a) Parent shall not and shall not permit any of the Restricted Subsidiaries to Incur any Indebtedness (including Acquired Indebtedness and Construction Indebtedness) if, immediately after giving effect to the Incurrence of such additional Indebtedness and the receipt and application of the proceeds therefrom, the aggregate principal amount of all outstanding Indebtedness of the Restricted Subsidiaries on a consolidated basis would be greater than 65% of their Adjusted Total Assets.
(b) Parent shall not, and will shall not permit any of the Restricted Subsidiary Subsidiaries to, Incur any Secured Indebtedness (including Acquired Indebtedness and Construction Indebtedness) if, immediately after giving effect to createthe Incurrence of such additional Secured Indebtedness and the receipt and application of the proceeds therefrom, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise the aggregate principal amount of all outstanding Secured Indebtedness of the Restricted Subsidiaries on a consolidated basis would be greater than 45% of their Adjusted Total Assets.
(collectively, “incur” c) Parent shall not and collectively, an “incurrence”) with respect shall not permit any of the Restricted Subsidiaries to Incur any Indebtedness (including Acquired Indebtedness) and Holdings will not issue ); provided, however, that any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantorsmay Incur Indebtedness (including Acquired Indebtedness and Construction Indebtedness) if, preferred stockafter giving effect to the Incurrence of such Indebtedness and the receipt and application of the proceeds therefrom, the Interest Coverage Ratio of the Restricted Subsidiaries on a consolidated basis would be at least 2.0 to 1.0; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur amount of Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness Incurred by Restricted Subsidiaries that are not Subsidiary Guarantors shall not exceed in the aggregate 8.0% of Adjusted Total Assets of the Restricted Subsidiaries.
(d) Notwithstanding paragraph (a), (b) or (c) above, Parent or any of the Restricted Subsidiaries (except as specified below) may Incur each and all of the following:
(1) Indebtedness of Parent or any of the Restricted Subsidiaries outstanding under any Credit Facility at any time in an aggregate principal amount not to exceed the greater of (x) $550,000,000 1.5 billion and (y) 50.040% of Consolidated EBITDA for Adjusted Total Assets of Parent and the most recently ended Test Period Restricted Subsidiaries;
(calculated on a Pro Forma Basis2) at Indebtedness of Parent or any one time outstanding. The foregoing limitations will not apply of the Restricted Subsidiaries owed to:
(a) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and Issuers evidenced by an unsubordinated promissory note, or
(ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings Parent or any Restricted Subsidiary; provided, to finance the purchasehowever, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary of Parent or any subsequent transfer of such Indebtedness (other than to Parent or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case case, to be constitute an incurrence Incurrence of such Indebtedness not permitted by this clauseclause (2);
(h3) Indebtedness of a Parent or any of the Restricted Subsidiary owing to Holdings or another Restricted SubsidiarySubsidiaries under Interest Rate Agreements; provided that if such agreements (x) are designed primarily to protect Parent or any of the Borrowers Restricted Subsidiaries against fluctuations in foreign currency exchange rates or interest rates (whether fluctuations of fixed to floating rate interest or floating to fixed rate interest) and (y) do not increase the Indebtedness of the obligor outstanding at any time other than as a Guarantor incur such result of fluctuations in foreign currency exchange rates or interest rates or by reason of fees, indemnities and compensation payable thereunder;
(4) Indebtedness owing to a of Parent or any of the Restricted Subsidiary that is not the Borrowers or a GuarantorSubsidiaries, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as extent the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;net proceeds thereof are promptly:
(i) shares used to purchase Notes tendered in a Change of preferred stock Control Offer made as a result of a Restricted Subsidiary issued Change of Control Triggering Event,
(ii) used to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer redeem all of any Capital Stock or any other event which results the Notes pursuant to Section 5 of the Notes,
(iii) deposited to defease the Notes as described in any such Restricted Subsidiary ceasing Sections 8.02 and 8.03, or
(iv) deposited to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed discharge the obligations under the Notes and this Indenture as described in each case to be an issuance of such shares of preferred stock not permitted by this clauseSection 8.01;
(j5) Hedging Obligations Permitted Government Revenue Bond Indebtedness;
(excluding Hedging Obligations entered into for speculative purposes6) (i) Guarantees by the Parent of Indebtedness of an Issuer or any of the Subsidiary Guarantors; (ii) Guarantees of Indebtedness of Parent or an Issuer by any of the Subsidiary Guarantors; provided the guarantee of such Indebtedness is permitted by and made in accordance with Section 4.14; and (iii) Guarantees by a Subsidiary Guarantor of any Indebtedness of any other Subsidiary Guarantor;
(7) Indebtedness outstanding on the Issue Date (other than Indebtedness under the Credit Agreement (other than the Term B Loan) or Indebtedness represented by the Notes and the Guarantees);
(k8) Indebtedness represented by the Notes and the Guaranties issued on the Issue Date and the exchange Notes and related exchange Guaranties to be issued in exchange for such Notes and Guaranties pursuant to the Registration Rights Agreement;
(9) Indebtedness consisting of obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, to pay insurance premiums Incurred in the ordinary course of business or consistent with past practicebusiness;
(i10) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereofof any bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities, and reinvestment obligations related thereto, entered into in the ordinary course of business;
(11) up to 100% Indebtedness in respect of workers’ compensation claims, unemployment or other insurance or self-insurance obligations, indemnities, bankers’ acceptances, performance, bid completion, return-of-money, appeal and surety bonds or guarantees and similar types of obligations in the net ordinary course of business;
(12) Indebtedness represented by cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale management obligations and other obligations in respect of Equity Interests of Holdings or cash contributed to the capital of Holdings (netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case, other than Excluded Contributions, any Cure Amount or proceeds case in connection with deposit accounts;
(13) Indebtedness supported by a letter of Disqualified Stock or sales of Equity Interests to Holdings credit procured by Parent or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to in a principal amount not in excess of the stated amount of such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares letter of preferred stock is secured by a Lien on credit and where the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall underlying Indebtedness would otherwise be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, thepermitted;
Appears in 1 contract
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:except
(a) Indebtedness arising under the Credit Documentsof any Loan Party pursuant to any Loan Document;
(bi) Indebtedness represented by of the Unsecured Asset Sale Bridge Borrower to any Subsidiary of the Borrower; and (including ii) Indebtedness of any guarantee thereof) in Wholly Owned Subsidiary Guarantor to the aggregate amount not to exceed €500,000,000;Borrower or another Subsidiary of the Borrower.
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)[Reserved];
(d) Indebtedness (including Capitalized Lease Obligations)outstanding on the Second Restatement Effective Date and listed on Schedule 11.2(d) including, Disqualified Stock for avoidance of doubt, the Congress Loans, and preferred stock incurred by Holdings any renewals, extensions, refundings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock refinancings of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted SubsidiaryIndebtedness, in an aggregate principal amount which, when aggregated with provided that (i) the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred such Indebtedness is not increased pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtednesssuch renewal, Disqualified Stock and preferred stock incurred pursuant to this clause (d)extension, does not exceed the greater of (x) $550,000,000 refunding or refinancing and (yii) 50.0% the weighted average life to maturity of Consolidated EBITDA for such Indebtedness after giving effect to such renewal, extension, refunding or refinancing is not earlier than the most recently ended Test Period (calculated on a Pro Forma Basis) at weighted average life to maturity of such Indebtedness immediately prior to such renewal, extension, refunding or refinancing, provided, further, in the time case of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback the Congress Loans, the foregoing limitations shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Intercreditor Agreement;
(e) Indebtedness incurred Guarantee Obligations made in the ordinary course of business by Holdings the Borrower or any Restricted of its Subsidiaries of obligations of the Borrower or any Subsidiary Guarantor;
(including letter f) [Reserved];
(g) [Reserved];
(h) Indebtedness arising from the honoring by a bank or other financial institution of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right extinguished within two Business Days of payment notice to the Guarantee relevant Borrower or the relevant Subsidiary of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clauseits incurrence;
(i) shares Indebtedness in respect of preferred stock performance bonds, bid bonds, appeal bonds, surety bonds, completion guarantees or other similar obligations arising in the ordinary course of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; business, provided that any subsequent issuance no such bond or transfer similar obligation is provided to secure the repayment of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clauseIndebtedness;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes)[Reserved];
(k) obligations Indebtedness incurred in respect connection with the financing of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, insurance premiums in the ordinary course of business or consistent with past practicebusiness;
(il) Indebtedness, Disqualified Stock [Reserved];
(m) Indebtedness of any Person in respect of any Restricted Payment made to it and preferred stock permitted pursuant to Section 11.6 to the extent such Restricted Payment is either made or recharacterized as a loan instead of Holdings a distribution;
(n) [Reserved];
(o) additional Indebtedness of the Borrower or any Restricted Subsidiary of its Subsidiaries in an aggregate principal amount or liquidation preference (together with for the Borrower and all Subsidiaries) not to exceed U.S. $2,000,000 at any Refinancing one time outstanding;
(p) additional Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings SMTC-Canada or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder Subsidiaries in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount (for SMTC-Canada and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant Subsidiaries) not to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) U.S. $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence 2,000,000 at any one time outstanding, or ; and
(yq) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof [Reserved].
(including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (ir) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the[Reserved].
Appears in 1 contract
Sources: Credit Agreement (SMTC Corp)
Limitation on Indebtedness. Holdings will notThe Borrower shall not create, and will not incur, assume or suffer to exist, or permit any Restricted Subsidiary of its Subsidiaries to create, incur, issueassume or suffer to exist, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness except (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect subject to the incurrence final sentence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) this Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:7.02):
(a) the Loans, Letters of Credit and any other Indebtedness arising under this Agreement or any other Loan Document and all loans, letters of credit and other Indebtedness under the Existing Five-Year Credit Agreement and all "Loan Documents" as defined therein;
(b) Indebtedness represented existing on the Effective Date and set forth in Schedule 7.02, and any extension, renewal, refunding and refinancing thereof, provided that after giving effect to such extension, renewal, refunding or refinancing, (A) the principal amount thereof is not increased, (B) neither the tenor nor the remaining average life thereof is reduced and (C) the interest rate thereon is not increased; provided, however, that the industrial revenue bonds identified by an asterisk in Schedule 7.02 may be refinanced at an interest rate higher than the Unsecured Asset Sale Bridge (including any guarantee thereof) rate in the aggregate amount not effect immediately prior to exceed €500,000,000;such refinancing; 105
(c) (i) Indebtedness (including of the Borrower to any unused commitment) outstanding on of its Subsidiaries, of any wholly-owned Subsidiary of the Closing Date listed on Schedule 10.1 Borrower to the Disclosure Letter and (ii) intercompany Indebtedness (including Borrower or of any unused commitment) outstanding on wholly-owned Subsidiary of the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party Borrower to another Credit Party)Subsidiary of the Borrower;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, appeal bonds required in the ordinary course of business or in connection with the enforcement of rights or claims of the Borrower or its Subsidiaries or in connection with judgments that do not result in a Default or an Event of Default;
(e) trade debt (including Indebtedness for the purchase of farm products from contract growers and other similar suppliers but excluding Indebtedness for Borrowed Money) incurred by the Borrower or any of its Subsidiaries in the ordinary course of business in a manner and to an extent consistent with their past practicepractices and necessary or desirable for the prudent operation of its businesses;
(f) Indebtedness secured by Liens permitted pursuant to Section 7.01 subject to the limitations contained therein;
(g) Indebtedness incurred in connection with the issuance of commercial paper;
(h) Indebtedness under Hedging Agreements entered into in the ordinary course of business to hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct of its business; and
(i) other present and future unsecured Indebtedness provided at the time of, and immediately after giving effect to, the incurrence of such Indebtedness, Disqualified Stock and preferred stock no condition or event shall exist which constitutes an Event of Holdings or any Restricted Subsidiary Default. Notwithstanding anything contained in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed this Agreement to the capital of Holdings (in each casecontrary, other than Excluded Contributionsthe Borrower shall not create, any Cure Amount incur or proceeds of Disqualified Stock assume, or sales of Equity Interests to Holdings or permit any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) Subsidiaries to the extent such net cash proceeds create, incur or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investmentsassume, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments any Priority Debt (other than Permitted Investments specified in clauses (a) and (c) Priority Debt resulting from the securing of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated existing Indebtedness with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(iiExcess Margin Stock), does not at any one time if after giving effect to such creation, incurrence or assumption the aggregate outstanding exceed the greater amount of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) Priority Debt at the time of such creation, incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes assumption would exceed 15% of the first paragraph total consolidated assets of this the Borrower and its Subsidiaries at the most recent fiscal quarter end of the Borrower for which financial statements have been delivered under Section 10.1 from and after the first date on which Holdings 6.09(a) or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; providedthe first delivery of such financial statements, 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 remaining weighted average life to maturity respective dates of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA most recent financial statements for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary Borrower referred to in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted SubsidiarySection 4.05(a); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 1 contract
Sources: Credit Agreement (Tyson Foods Inc)
Limitation on Indebtedness. Holdings The Borrower will not, and will not permit any of the Restricted Subsidiary to Subsidiaries to, create, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) (x) Indebtedness arising under the Credit DocumentsDocuments (including any Indebtedness incurred pursuant to Section 2.14), (y) Indebtedness arising under the ABL Facility and any Permitted Receivables Financing in an aggregate principal amount not to exceed at any time outstanding the sum of $4,500,000,000 and the portion of the Free and Clear Amount that the Borrower has elected to apply to increase capacity under this clause (a)(y) to the extent such commitments and/or loans are not otherwise reduced or terminated and any modification, replacement, refinancing, refunding, renewal, defeasance or extension of any Indebtedness arising under the ABL Facility and any Permitted Receivables Financing and, in each case, any Indebtedness incurred to so modify, replace, refinance, refund, renew, defease or extend such Indebtedness and, except to the extent otherwise expressly permitted hereunder, the principal amount of any such modification, replacement, refinancing, refunding, renewal, defeasance or extension does not exceed the principal amount thereof outstanding immediately prior to such modification, replacement, refinancing, refunding, renewal or extension except by an amount equal to the unpaid accrued interest and premium thereon plus other reasonable amounts paid and fees and expenses incurred in connection with such modification, replacement, refinancing, refunding, renewal or extension; provided that the Borrower shall give the Administrative Agent prompt written notice of any increase in the aggregate amount committed in respect of the ABL Facility, and (z) intercompany Indebtedness of Restricted Subsidiaries, and any Guarantee Obligations in respect thereof, to allocate the Borrower’s cost of borrowing to such Subsidiaries with respect to Indebtedness referred to in subclauses (x) and (y) or in respect of Indebtedness incurred following the Fifth Restatement Effective Date by the Borrower;
(b) Subject to compliance with Section 10.5, Indebtedness represented by of the Unsecured Asset Sale Bridge (including Borrower or any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 Restricted Subsidiary owed to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings Borrower or any Restricted Subsidiary; provided that, in each case, all such Indebtedness of any Credit Party owed to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment any Person that is used or useful not a Credit Party shall be subordinated in a Similar Business, whether through the direct purchase right of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject payment to the foregoing limitation so long as the proceeds Obligations of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Credit Party on customary terms;
(eA) Indebtedness incurred by Holdings or in respect of any Restricted Subsidiary (including bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities and discounted bills of exchange or the discounting or factoring of receivables for credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued management purposes, in each case entered into or undertaken in the ordinary course of business), business (including (i) in respect of workers’ workers compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims, (ii) any bank guarantees, letters of credit or similar facilities by any Governmental Authority or to satisfy any governmental or regulatory requirements, (iii) any tenders, statutory obligations, surety and appeal bonds, bids, leases, governmental contracts, performance and return-of-money bonds and other similar obligations incurred in the ordinary course of business or consistent with past practices and (iv) Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance) and (B) Indebtedness supported by a letter of credit issued pursuant to credit facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(fd) subject to compliance with Section 10.5, Guarantee Obligations incurred by (i) Restricted Subsidiaries in respect of Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary Borrower or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided Subsidiaries that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing is not prohibited to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness incurred under this Agreement (except to another the extent of any express restriction on Guarantee Obligations relating to such Indebtedness provided for herein) and (ii) the Borrower or another in respect of Indebtedness of Restricted SubsidiarySubsidiaries that is not prohibited to be incurred under this Agreement; provided that, except as provided in clauses (j) and (k) below, there shall be deemed, in each case to be an incurrence of such Indebtedness not permitted no guarantee by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausea Credit Party;
(e) Guarantee Obligations (i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, incurred in the ordinary course of business in respect of obligations of (or consistent with past practiceto) suppliers, customers, franchisees, lessors and licensees or (ii) otherwise constituting Investments permitted by Sections 10.5(e), 10.5(g), 10.5(i) or 10.5(q);
(f) (i) Indebtedness, Disqualified Stock Indebtedness (including Indebtedness arising under Capital Leases and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereofpurchase money indebtedness) up to 100% incurred within one year of the net cash proceeds received by Holdings since immediately after acquisition, purchase, construction, repair, replacement, expansion or improvement of fixed or capital assets to finance the Closing Date from acquisition, purchase, construction, repair, replacement, expansion or improvement of such fixed or capital assets (whether through the issue direct purchase of assets or sale the Stock of Equity Interests of Holdings or cash contributed to the capital of Holdings any Person owning such assets), (ii) Indebtedness arising under Capital Leases entered into in each caseconnection with Permitted Sale Leasebacks and (iii) Indebtedness arising under Capital Leases, other than Excluded Contributions(x) Capital Leases in effect on or prior to September 30, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries2022 and (y) as determined Capital Leases entered into after September 30, 2022 and in accordance with Sections 10.5(a)(iii)(B) effect on the Fifth Restatement Effective Date and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied set forth on Schedule 10.1 and Capital Leases entered into pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments subclauses (other than Permitted Investments specified in clauses (a) and (c) of the definition thereofi) and (ii) Indebtednessabove; provided, Disqualified Stock or preferred stock that the aggregate amount of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and Indebtedness incurred pursuant to this clause subclause (l)(ii), does not iii) at any one time outstanding shall not exceed the greater of (x) $825,000,000 500,000,000 and (y) 75.05% of Consolidated EBITDA for the most recently ended recent Test Period for which Section 9.1 Financials have been delivered, and (calculated on a Pro Forma Basisiv) at any modification, replacement, refinancing, refunding, renewal or extension of any Indebtedness specified in subclause (i), (ii) or (iii) above and any Indebtedness incurred to so modify, replace, refinance, refund, renew, defease or extend such Indebtedness; provided that, except to the time extent otherwise expressly permitted hereunder, the principal amount of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock Indebtedness incurred pursuant to this clause subclause (l)(iiiv) shall cease does not exceed the principal amount thereof outstanding immediately prior to be deemed such modification, replacement, refinancing, refunding, renewal or extension except by an amount equal to the unpaid accrued interest and premium thereon plus other reasonable amounts paid and fees and expenses incurred in connection with such modification, replacement, refinancing, refunding, renewal or outstanding for purposes extension;
(i) other than Indebtedness described in subclause (ii) of this clause (l)(iig), Indebtedness (including any unused commitment) but shall be deemed (x) outstanding on or prior to September 30, 2022 and (y) incurred for after September 30, 2022 and outstanding on the purposes of Fifth Restatement Effective Date and set forth on Schedule 10.1, (ii) Indebtedness existing on the first paragraph of this Section 10.1 from Fifth Restatement Effective Date and after owed by the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings Borrower or any Restricted Subsidiary to the Borrower or any Restricted Subsidiary, and any Guarantee Obligations in respect thereof, but only for so long as such Indebtedness or any refinancing, refunding or renewal thereof permitted by this subclause (ii) is held by the Borrower, such Restricted Subsidiary or a Credit Party and, in the case of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under each of the first paragraph of this Section 10.1 and clauses preceding subclauses (bi) and (cii), any modification, replacement, refinancing, refunding, renewal, defeasance or extension thereof (including any unused commitment) aboveand any Indebtedness incurred to so modify, clause replace, refinance, refund, renew, defease or extend such Indebtedness (l)(ior, in the case of subclause (ii) andonly, any intercompany transfer of creditor positions in respect thereof pursuant to intercompany debt restructurings); provided that all such Indebtedness arising as a result of any such transfer of creditor positions as contemplated by subclause (ii) of any Credit Party owed to any Person that is not a Credit Party shall be subordinated to the Obligations of such Credit Party on customary terms; provided, further, that, except to the extent otherwise expressly permitted hereunder, in the case of any such modification, replacement, refinancing, refunding, renewal, defeasance or extension (but not any such transfer of creditor positions), (x) the original aggregate principal amount thereof does not exceed the aggregate principal amount thereof outstanding immediately prior to such modification, replacement, refinancing, refunding, renewal, defeasance or extension except by an amount equal to any accrued interest and premium thereon plus other reasonable amounts paid and fees and expenses incurred in connection with such modification, replacement, refinancing, refunding, renewal. defeasance or extension, or paid in respect of such Indebtedness, (y) the direct and contingent obligors with respect to such Indebtedness are not changed (except that any Credit Party may also be made an obligor thereunder), and (z) except in the case of a refinancing of Indebtedness pursuant to subclause (ii), or any customary bridge facility so long as the long-term debt into which such customary bridge facility is to be converted satisfies the provisions of this clause (m) and clause z), either (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”I) such IndebtednessIndebtedness has the same or later final maturity and, Disqualified Stock except in the case of Revolving Credit Commitments, the same or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 longer remaining weighted average life to maturity of than the Indebtedness, Disqualified Stock or preferred stock Indebtedness being refinanced, refinanced (2) except to the extent of nominal amortization) or (II) no portion of such Refinancing refinancing Indebtedness refinances matures prior to the Final Maturity Date (determined as of the date such Indebtedness is incurred);
(h) Indebtedness in respect of Hedge Agreements;
(i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence Credit Parties in an aggregate principal amount at any one time outstandingoutstanding not to exceed $2,000,000,000;
(1) Indebtedness of a Person or Indebtedness attaching to assets of a Person that, in either case, becomes a Restricted Subsidiary (or (yis a Restricted Subsidiary that survives a merger with such Person) Persons or Indebtedness attaching to assets that are acquired by Holdings the Borrower or any Restricted Subsidiary Subsidiary, in each case after the Closing Date as the result of a Permitted Acquisition or merged into or consolidated with Holdings or Investment not prohibited hereby; provided that (w) such Indebtedness existed at the time such Person became a Restricted Subsidiary or at the time such assets were acquired and, in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisitioneach case, mergerwas not created in anticipation thereof, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theand
Appears in 1 contract
Limitation on Indebtedness. Holdings The Borrower will not, and will cause each of its Subsidiaries not permit any Restricted Subsidiary to to, create, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit the Borrower or any Restricted Subsidiary to issue any shares of Disqualified Stock orthe Borrower, in except (without duplication):
(a) Obligations;
(b) intercompany Indebtedness by and among the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, Borrower and any of its Restricted Subsidiary may incur Indebtedness Subsidiaries;
(including Acquired Indebtedness)c) Swap Agreements entered into pursuant to Section 5.11 above and, issue shares of Disqualified Stock so long as there exists no Default both before and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if any such Indebtedness, Disqualified Stock or shares in the case of preferred stock is secured the Borrower, other Swap Agreements entered into by a Lien on the Collateral on a junior priority basis Borrower and its Restricted Subsidiaries (except the License Subsidiaries) with the Liens on Lenders or any of them for the Collateral securing purpose of hedging against interest rate fluctuations with respect to variable rate Indebtedness of the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio Borrower or any of Holdings and the Restricted Subsidiaries (including for except the purposes License Subsidiaries);
(d) (i) in the case of such calculation any Disqualified Stock or shares the Borrower, the 2001 Senior Subordinated Indebtedness and the 2005 Senior Subordinated Indebtedness and (ii) in the case of preferred stock that is secured by a Lien on a junior basis to the Liens Restricted Subsidiaries, the 2001 Senior Subordinated Guaranties and the 2005 Senior Subordinated Guaranties, in each case of clauses (i) and (ii) preceding, as in effect on the Collateral securing the Obligations), Effective Date;
(e) so long as there exists no Default both before and immediately after giving effect to the incurrence of any such Indebtedness, amounts assumed by the Borrower and its Restricted Subsidiaries (except the License Subsidiaries) in connection with Permitted Acquisitions subject to (i) for Permitted Acquisitions with a purchase price less than $50,000,000, delivery of a Compliance Certificate evidencing pro-forma compliance after giving effect to such Permitted Acquisition, (ii) for Permitted Acquisitions with a purchase price equal to or more than $50,000,000, delivery of a Compliance Certificate evidencing pro-forma compliance after giving effect to such Permitted Acquisition for a period of one year, together with supporting projections with respect thereto, in each case such Indebtedness to consist of Purchase Money Indebtedness and/or Capital Lease Obligations (provided that such Indebtedness so assumed (A) are not incurred or created in connection with any such Permitted Acquisition and the use were not incurred or created in anticipation of proceeds thereofsuch Permitted Acquisition, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) are pursuant to terms not materially more restrictive on the Fixed Charge Coverage Ratio Borrower or any Restricted Subsidiary than the terms of Holdings this Agreement, (C) are pursuant to terms which do not conflict with any provision of this Agreement or any other Loan Document and (D) do not include any collateral or any guarantees except as specifically permitted by this Agreement) and any refinancings, refundings, renewals or extensions of such Indebtedness so long as such refinancing, refunding, renewal or extension satisfies the conditions contained in clauses (B), (C) and (D) of this Section 6.02(e).
(f) Indebtedness not described in subsection (d) above that is existing on the Effective Date and described on Schedule 6.02, as in effect on the Effective Date and any refinancings, refundings, renewals or extensions thereof; provided that (i) the principal amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension and (ii) the terms relating to principal amount, amortization, maturity, collateral (if any) and subordination (if any), and the Restricted Subsidiariesother material terms taken as a whole, of any such refinancing, refunding, renewing or extending Indebtedness, and of any agreement entered into and of any instrument issued in connection therewith, are no less favorable in any material respect to the Loan Parties and the Lenders than the terms of any agreement or instrument governing the Indebtedness being refinanced, refunded, renewed or extended and the interest rate applicable to any such refinancing, refunding, renewing or extending Indebtedness does not exceed the then applicable market interest rate;
(g) so long as there exists no Default both before and immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if any such Indebtedness, Disqualified Stock or shares unsecured Indebtedness of preferred stock is the Borrower of up to $10,000,000 in the aggregate at any time outstanding (i) unsecured or (ii) is secured by assets provided that do not become Collateral, either such Indebtedness incurred (A) is pursuant to terms not materially more restrictive on the Consolidated Total Debt Borrower or any Restricted Subsidiary than the terms of this Agreement, (B) is pursuant to Consolidated EBITDA Ratio terms which do not conflict with any provision of Holdings this Agreement or any other Loan Document and the Restricted Subsidiaries (including for the purposes of such calculation C) does not include any Disqualified Stock collateral or shares of preferred stock that is unsecuredany guarantees except as specifically permitted by this Agreement), ;
(h) so long as there exists no Default both before and immediately after giving effect to the incurrence of any such Indebtedness Indebtedness, Subordinated Debt of the Borrower issued by the Borrower after the Effective Date, having terms and conditions satisfactory to the use of proceeds thereofAdministrative Agent and subject to documentation satisfactory to the Administrative Agent, on including without limitation, (A) a Pro Forma Basis would not exceed 6.50:1.00 or maturity no earlier than the date which is six months after the Maturity Date, and (B) the Fixed Charge Coverage Ratio terms of Holdings such refinanced Indebtedness (I) are not materially more restrictive on the Borrower or any Restricted Subsidiary than the terms of this Agreement, (II) do not conflict with any provision of this Agreement or any other Loan Document and (III) do not include any additional collateral or any additional guarantees (other than Guarantees of such Indebtedness by one or more Restricted Subsidiaries of the Borrower that constitute Subordinated Debt of such Restricted Subsidiaries, Subsidiaries so long as such Guarantees otherwise satisfies the requirements of this clause (h)) except as specifically permitted by this Agreement; and
(i) so long as there exists no Default both before and immediately after giving effect to the incurrence of any such Indebtedness, Indebtedness of the Borrower and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that Restricted Subsidiaries (except the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (cLicense Subsidiaries) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) up to $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) 20,000,000 in the aggregate amount at any time outstanding (provided that such Indebtedness incurred (A) is pursuant to terms not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding materially more restrictive on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings Borrower or any Restricted Subsidiary under or than the terms of this Agreement, (B) is pursuant to terms which do not conflict with any “synthetic lease” transactions to on-balance sheet Indebtedness provision of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock Agreement or any other event which results in Loan Document and (C) does not include any such Restricted Subsidiary ceasing to be a Restricted Subsidiary collateral or any other subsequent transfer of any such Indebtedness (guarantees except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not as specifically permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposesAgreement);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 1 contract
Sources: Credit Agreement (Radio One Inc)
Limitation on Indebtedness. Holdings will The Borrower shall not, and will shall not permit any Restricted Subsidiary to of its Subsidiaries to, create, incur, issue, assume, guarantee suffer to exist, or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) remain directly or indirectly liable with respect to to, any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising under the Credit Documentsincurred pursuant to this Agreement;
(b) Indebtedness represented by consisting of Contingent Obligations in respect of obligations of other Persons (excluding for purposes of this Section 7.04(b) only, Contingent Obligations of the Unsecured Asset Sale Bridge (including any guarantee thereofBorrower in respect of airplane leases of its Subsidiaries not to exceed $50,000,000 in aggregate amount) in the an aggregate amount not to exceed €500,000,000at any one time outstanding 3% of Net Worth;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed identified on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)7.04;
(d) Indebtedness incurred in the ordinary course of business in connection with (including Capitalized Lease Obligations), Disqualified Stock i) Capital Leases which are non-recourse to the Borrower or its Subsidiaries and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personalii) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the money Indebtedness and other Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, Leases in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then not to exceed at any one time outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.03% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Net Worth;
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insuranceObligations under Swap Contracts entered into for hedging purposes;
(f) Indebtedness arising of the Borrower and its Subsidiaries having a maturity of 92 days or less representing borrowings from agreements of Holdings a bank or banks with which the Borrower or such Subsidiary has a Restricted depository relationship, which borrowings shall be fully secured by Cash Equivalents purchased by the Borrower or such Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion proceeds of such business, assets or a Subsidiary for the purpose of financing such acquisitionborrowings;
(g) Indebtedness Obligations incurred in the ordinary course of Holdings business in connection with relocation service transactions and secured by properties which are the subject to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausetransactions;
(h) Indebtedness incurred by the Borrower or a Subsidiary to fund a Permitted Acquisition and Indebtedness of a Restricted Person that becomes a Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if after the Borrowers or a Guarantor incur such Indebtedness owing Closing Date pursuant to a Restricted Subsidiary that is Permitted Acquisition, which Indebtedness existed prior to such Acquisition and was not the Borrowers or a Guarantor, such Indebtedness is subordinated created in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausecontemplation thereof;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clauseIndebtedness under the Public Debentures;
(j) Hedging Obligations so long as no Default or Event of Default has occurred and is continuing at the time of incurrence thereof or after giving effect thereto, unsecured Indebtedness of the Borrower; provided that such Indebtedness (excluding Hedging Obligations entered into i) shall have a stated maturity of no earlier than ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) shall not have any scheduled principal payments or provide for speculative purposesany mandatory prepayments or redemptions or repurchases not otherwise provided to the Lenders hereunder prior to March 19, 2013 (other than (A) by way of acceleration after default or (B) in respect of, or upon, the conversion or mandatory prepayment of Convertible Indebtedness); and (iii) has covenants, defaults and other terms and conditions (other than interest rates and change of control or “fundamental change” provisions) no more restrictive (when taken as a whole) than those contained in this Agreement; provided further that the net cash proceeds from any such Indebtedness shall be used to prepay Revolving Loans, if any, that are outstanding at the time the Borrower receives such net cash proceeds (without a mandatory corresponding reduction in the Aggregate Commitments) (it being understood that (I) nothing in this proviso prohibits the Borrower from making any Borrowing subsequent to or substantially simultaneous with such prepayment if otherwise permitted by, and in accordance with, the terms of this Agreement and (II) “mandatory prepayment” with respect to Convertible Indebtedness includes, and the “stated maturity” of Convertible Indebtedness does not include, the repurchase of Convertible Indebtedness by the Borrower at the option of the creditor of such Convertible Indebtedness (whether upon the occurrence of specified events or conditions, on specified dates or otherwise);
(k) obligations in respect so long as no Default or Event of self-insuranceDefault has occurred and is continuing at the time of incurrence thereof, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect other unsecured Indebtedness of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practiceSubsidiaries;
(il) Indebtedness, Disqualified Stock and preferred stock obligations consisting of Holdings or guarantees of any Restricted Subsidiary of Indebtedness of insurance agents of an Insurance Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up not to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not exceed at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.03% of Consolidated EBITDA for Net Worth;
(m) Indebtedness of the most recently ended Test Period Borrower owing to any Subsidiary, provided that the payment of such Indebtedness is subordinate to the payment of the Obligations in a manner satisfactory to the Administrative Agent;
(calculated on a Pro Forma Basisn) Non-Recourse Debt of the Designated Subsidiaries;
(o) Synthetic Lease Obligations under the Permitted Synthetic Lease and, so long as no Default or Event of Default has occurred and is continuing at the time of incurrence (it being understood that any Indebtednessthereof, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes other Synthetic Lease Obligations, provided the aggregate Attributable Indebtedness in respect of this clause (l)(ii) but shall be deemed incurred for the purposes all of the first paragraph foregoing shall not exceed at any one time outstanding 3% of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii))Net Worth;
(mp) the incurrence so long as no Default or issuance by Holdings or any Restricted Subsidiary Event of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 Default has occurred and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) continuing at the time of incurrence at thereof, Indebtedness arising in connection with a Permitted Accounts Securitization; and
(q) any one time outstandingextensions, renewals or refinancings (ybut not increases) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with of the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theforegoing.
Appears in 1 contract
Sources: Credit Agreement (Fidelity National Financial, Inc.)
Limitation on Indebtedness. Holdings will notNot, and will not permit any Restricted Subsidiary to createof its Subsidiaries to, incur, issue, assume, guarantee incur or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) at any time be liable with respect to any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising outstanding under this Agreement in respect of the Credit DocumentsLoans and other Liabilities;
(b) Indebtedness represented outstanding on the Closing Date described on Schedule 9.1; provided, that Indebtedness permitted by this clause (b) does not include any extension, renewal or refunding of any such outstanding Indebtedness unless such extension, renewal or refunding of such Indebtedness does not (A) increase the Unsecured Asset Sale Bridge principal amount of or rate of interest on such Indebtedness, (including B) shorten the Average Life of such Indebtedness, or (C) make the terms of such Indebtedness less favorable to the Borrower or any guarantee thereof) in Subsidiary of the aggregate amount not to exceed €500,000,000Borrower;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed secured by a Credit Party to another Credit Party)Permitted Lien;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Hedging Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued entered into in the ordinary course of business), in respect ;
(e) Other Indebtedness the proceeds of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness which are used solely to pay the Liabilities; provided that a permanent ratable reduction is made with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurancethe Commitments in an amount equal to such proceeds;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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 acquisitionPermitted Transactions;
(g) Indebtedness Indebtedness, or refinancings thereof, under reimbursement obligations in respect of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer letters of any Capital Stock or any other event which results credit incurred in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer the ordinary course of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausebusiness;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings the Borrower or another Restricted Subsidiary; provided that if its Subsidiaries consisting of deferred payment obligations resulting from the Borrowers adjudication or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer settlement of any such Indebtedness (except to Holdings claim or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence Litigation of such Indebtedness not permitted by this clausethe Borrower or its Subsidiaries;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clauseIndebtedness resulting from reserves for outstanding checks;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes)Indebtedness of the Significant Subsidiaries resulting from the sale or securitization of receivables so long as such receivables constitute non-admitted assets of such Significant Subsidiaries; provided, that Indebtedness related to any sale or securitization will be nonrecourse to the Significant Subsidiaries;
(k) obligations in Indebtedness with respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary to Contingent Obligations in an aggregate principal amount or liquidation preference not exceeding $15,000,000;
(together with any Refinancing l) Indebtedness in respect thereof) up to 100% of Wholly-Owned Subsidiaries of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed Borrower owing to the capital Borrower or another Wholly- Owned Subsidiary of Holdings (in each casethe Borrower, other than Excluded Contributions, any Cure Amount or proceeds and Indebtedness of Disqualified Stock or sales of Equity Interests the Borrower owing to Holdings or any of its Wholly-Owned Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) Indebtedness in respect of deferred Taxes reserved on the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity financial statements of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a GuarantorBorrower in accordance with GAAP;
(n) Indebtedness, Disqualified Stock or preferred stock Indebtedness of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted SubsidiaryBLHC; provided that such Indebtedness is nonrecourse to the amount Borrower or any of Indebtedness its assets or the assets of any Subsidiary of the Borrower (other than Acquired IndebtednessBLHC), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the;
Appears in 1 contract
Sources: Credit Agreement (Conseco Inc Et Al)
Limitation on Indebtedness. Holdings will The Borrowers shall not, and will shall not permit any Restricted Subsidiary to createto, incur, issue, assume, guarantee create or otherwise become liablesuffer to exist any Financial Indebtedness, contingently or otherwise except for the following Financial Indebtedness (collectively, “incur” and collectively, an “incurrencePermitted Indebtedness”):
(i) with respect to the Obligations incurred hereunder;
(ii) Affiliate Subordinated Debt;
(iii) Hedge Agreements entered into by any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit Borrower or any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case ordinary course of Restricted Subsidiaries that are business and not Guarantors, preferred stock; provided that Holdings, the Borrowers for speculative purposes and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured guarantees thereof by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries and the Borrowers (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligationsas applicable), after giving effect provided that only Specified Hedge Agreements shall be entitled to the incurrence benefits of such the Security Documents;
(iv) unsecured Financial Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would that does not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding an aggregate principal amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) 5,000,000 at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documents;
(bA) Financial Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding of a Restricted Subsidiary existing on the Closing Date listed on Schedule 10.1 to date such entity becomes a Restricted Subsidiary provided that such Financial Indebtedness was not incurred by such Restricted Subsidiary in connection with the Disclosure Letter acquisition of such entity by any Borrower or its Subsidiaries and (iiB) intercompany any Financial Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under to refinance, renew, replace, defease or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiaryrefund, in an aggregate principal amount whichwhole or in part, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock any Financial Indebtedness specified in clause (A) above and preferred stock then outstanding and any Financial Indebtedness incurred pursuant to this clause (dB) (plus accrued interest and all Refinancing Indebtedness incurred expenses related to refinance any other Indebtednesssuch financing renewal, Disqualified Stock and preferred stock incurred pursuant to this clause (dreplacement, defeasance or refunding), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings the principal amount (or accrued value) thereof is not more than the principal amount of such refinanced, renewed, replaced, defeased or refunded plus interest, fees, discounts, premiums and expenses);
(vi) Financial Indebtedness of any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation Subject Party so long as the proceeds Borrowers reduce the Commitments in an amount equal to the Net Cash Proceeds of such Permitted Sale Leaseback are used by Holdings Financial Indebtedness;
(vii) if the Approved Target is a Restricted Subsidiary, the “Existing Debt” as defined in the Approved Target Disclosure Letter and any refinancings, renewals, replacements, defeasance or refunding thereof (plus accrued interest and expenses related to such Restricted Subsidiary in accordance with Section 5.2(arefinancing, renewal, replacement, defeasance or refunding), provided that the principal amount (or accrued value) thereof is not more than the principal amount of such refinanced, renewed, replaced, defeased or refunded plus interest, fees, discounts, premiums and expenses);
(eviii) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in if the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to Approved Target is a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Financial Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations Approved Target in respect of letters of credit, credit and bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in that does not exceed an aggregate principal amount or liquidation preference of $35,000,000 at any one time outstanding;
(together with any Refinancing ix) Financial Indebtedness of GLPT Inc. in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale capital expenditure programs of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of it and its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have Subsidiaries that does not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in exceed an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not $40,000,000 at any one time outstanding exceed the greater of outstanding; or
(x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for if the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, that such Refinancing Indebtedness (1) has a weighted average life to maturity at the time such Refinancing Indebtedness Approved Target is incurred which is not less than the remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that , the amount of Indebtedness (other than Acquired Indebtedness)Approved Target or its subsidiaries may enter into Hedge Agreements in notional amounts, Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or of, (x) in connection with interest rate Hedge Agreements not exceeding, $300,000,000 and (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance connection with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisitioncurrency Hedge Agreements not exceeding, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the700,000,000;
Appears in 1 contract
Sources: Credit Agreement (Brookfield Infrastructure Partners L.P.)
Limitation on Indebtedness. Holdings ▇▇▇▇▇▇▇▇▇ will not, and nor will not it cause or permit any Restricted Subsidiary to createto, directly or indirectly, incur, issuecreate, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect permit to exist any Indebtedness except:
(including Acquired Indebtednessa) Indebtedness of ▇▇▇▇▇▇▇▇▇ and Holdings will not issue its Subsidiaries outstanding on the Closing Date and disclosed on Schedule 7.01 and any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock orextensions, in the case of Restricted Subsidiaries that are not Guarantors, preferred stockrenewals or refinancings thereof; provided that Holdings(i) the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder and (ii) the terms relating to principal amount, amortization, maturity, collateral (if any) and subordination (if any), and other material terms taken as a whole, of any such refinancing, refunding, renewing or extending Indebtedness, and of any agreement entered into and of any instrument issued in connection therewith, are no less favorable in any material respect to the Borrowers or the Lenders than the terms of any agreement or instrument governing the Indebtedness being refinanced, refunded, renewed or extended and their Restricted the interest rate applicable to any such extending, renewing or refinancing Indebtedness does not exceed the then applicable market interest rate;
(b) Indebtedness of the Borrowers under this Agreement and the other Loan Documents;
(c) Indebtedness consisting of obligations (contingent or otherwise) existing or arising under any interest rate Hedging Contract, provided that such obligations are (or were) entered into by ▇▇▇▇▇▇▇▇▇ or such Subsidiary in the ordinary course of business and not for purposes of speculation;
(d) (i) Indebtedness of ▇▇▇▇▇▇▇▇▇ and its Subsidiaries not otherwise permitted by this Section 7.01 incurred after the Closing Date in an aggregate principal amount not to exceed $600,000,000 at any time outstanding; provided that (A) up to $50,000,000 aggregate principal amount of such Indebtedness may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stockbe secured, (1B) if such Indebtedness, Disqualified Stock no Default or shares Event of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings Default shall have occurred and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), be continuing immediately before and immediately after giving effect to such incurrence and (C) after giving pro forma effect to the incurrence of such Indebtedness and to the use concurrent retirement of proceeds thereofany other Indebtedness of ▇▇▇▇▇▇▇▇▇ or any Subsidiary (including, on a Pro Forma Basis would not exceed 5.00:1.00in each case, any Indebtedness incurred or retired in connection therewith and including all other transactions that are required to be given pro forma effect under this Credit Agreement that have occurred since the date of the last financial statements delivered to the Administrative Agent pursuant to Section 6.01(a) or (2) if such Indebtednessb)), Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis ▇▇▇▇▇▇▇▇▇ shall be in compliance with the Liens financial covenants set forth in Section 7.12 as if measured on such date of incurrence and retirement; (ii) unsecured Indebtedness of ▇▇▇▇▇▇▇▇▇ that is not Guaranteed by any Subsidiary other than the Collateral securing Subsidiary Borrowers and which such Indebtedness (and any Subsidiary Borrower’s guarantee thereof) is subordinated in right and time of payment to the Obligations, either ; and (Aiii) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock which is only exchangeable or shares convertible into unsecured, subordinated Indebtedness of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or ▇▇▇▇▇▇▇▇▇ as contemplated in sub-clause (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) this Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a7.01(d);
(e) Purchase Money Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter Capital Leases) of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters ▇▇▇▇▇▇▇▇▇ and its Subsidiaries incurred after the Closing Date; provided that (i) such Indebtedness is issued and any Liens securing such Indebtedness are created concurrently with, or within 180 days after, the acquisition of credit issued in the ordinary course asset financed and (ii) such Indebtedness does not exceed the cost of business)the property being acquired on the date of the acquisition, in respect plus any related costs of workers’ compensation claims, deferred compensation, performance the acquisition or surety bonds, health, disability or other employee benefits or financing of such property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;; and
(f) Indebtedness arising from agreements of Holdings or a Restricted (i) ▇▇▇▇▇▇▇▇▇ owed to any Subsidiary providing for indemnificationof ▇▇▇▇▇▇▇▇▇, adjustment and (ii) any Subsidiary of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings ▇▇▇▇▇▇▇▇▇ owed to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock ▇▇▇▇▇▇▇▇▇ or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed▇▇▇▇▇▇▇▇▇, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, extent such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph provisions of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the7.03.
Appears in 1 contract
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising of the Borrower under the Credit Documentsthis Agreement;
(b) Indebtedness represented by of the Unsecured Asset Sale Bridge (including Borrower to any guarantee thereof) in Restricted Subsidiary and of any Restricted Subsidiary to the aggregate amount not to exceed €500,000,000Borrower or any other Restricted Subsidiary;
(c) Indebtedness of the Borrower and any of its Restricted Subsidiaries incurred to finance the acquisition of fixed or capital assets (iwhether pursuant to a loan, a Financing Lease or otherwise) not exceeding $15,000,000 in aggregate principal amount at any one time outstanding and any refinancings, refundings, renewals or extensions thereof (provided that the principal amount of such Indebtedness (including shall at no time exceed 100% of the original acquisition cost of such assets plus any unused commitment) outstanding on costs associated with the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Partyfinancing or refinancing thereof);
(d) Indebtedness outstanding on the date hereof and listed on Schedule 6.2 and any refinancings, refundings, renewals or extensions thereof (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment provided that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtednesssuch Indebtedness is not increased by an amount greater than costs associated with any such refinancing, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtednessrefundings, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings renewals or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(aextensions);
(e) Indebtedness incurred by Holdings of a Person which becomes a Restricted Subsidiary after the date hereof and any refinancings, refundings, renewals or any extensions thereof, provided that (i) such Indebtedness existed at the time such Person became a Restricted Subsidiary (including letter or, if later, at the time it acquired the assets of credit obligations consistent with past practice constituting reimbursement obligations with respect a business pursuant to letters subsection 6.8(c)) and was not created in anticipation thereof and (ii) immediately after giving effect to the acquisition of credit issued in such Person by the ordinary course Borrower no Default or Event of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insuranceDefault shall have occurred and be continuing;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;Permitted Additional Indebtedness; and
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such additional Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated exceeding $25,000,000 in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 1 contract
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness except:
(including Acquired Indebtednessi) and Holdings will not issue any shares Indebtedness of Disqualified Stock and will not permit any Restricted a Subsidiary of the Borrower owed to issue any shares the Borrower or a wholly-owned Subsidiary of Disqualified Stock orthe Borrower, which Indebtedness shall (A) in the case of Restricted Subsidiaries that are not GuarantorsIndebtedness owed to a Loan Party, preferred stock; provided that Holdingsconstitute “Pledged Notes” under the Pledge Agreement, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect be on terms (including subordination terms) acceptable to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 Administrative Agent and (3C) if such Indebtedness, Disqualified Stock or shares be otherwise permitted under the provisions of preferred stock is (i) unsecured or Section 7.03;
(ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Loan Documents;
(biii) Indebtedness represented by of the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) Borrower and its Subsidiaries outstanding on the Closing Date listed and disclosed on Schedule 10.1 to 7.02 (collectively, the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party“Existing Debt”);
(div) Indebtedness consisting of Guarantees (including Capitalized Lease Obligations)A) by the Borrower in respect of Indebtedness, Disqualified Stock leases and preferred stock other ordinary course obligations permitted to be incurred by Holdings Wholly-Owned Domestic Subsidiaries of the Borrower, and (B) by Domestic Subsidiaries of the Borrower of Indebtedness, leases or any Restricted Subsidiaryother ordinary course obligations permitted to be incurred by, or obligations in respect of Permitted Acquisitions of, the Borrower or Wholly-Owned Domestic Subsidiaries of the Borrower;
(v) Purchase Money Indebtedness and Attributable Indebtedness in respect of Capital Leases and Synthetic Lease Obligations of the Borrower and its Subsidiaries incurred after the Closing Date to finance Consolidated Capital Expenditures permitted by Section 7.12; provided that (A) the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing such Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed $3,000,000 at any time outstanding, (B) the greater of (x) $550,000,000 and (y) 50.0Debt when incurred shall not be more than 100% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at lesser of the cost or fair market value as of the time of incurrenceacquisition of the asset financed, (C) such Indebtedness is issued and any Liens securing such Indebtedness are created concurrently with the acquisition of the asset financed and (D) no Lien securing such Indebtedness shall extend to or cover any property or asset of any the Borrower or any Subsidiary other than the asset so financed;
(vi) Indebtedness of the Borrower or its Subsidiaries secured by Liens permitted by Section 7.01(xi) and any other Indebtedness of a Person whose Equity Interests or assets are acquired in a Permitted Acquisition which is acquired or assumed by the Borrower or a Subsidiary of the Borrower in such Permitted Acquisition and any Permitted Refinancing thereof; provided that Capitalized Lease Obligations (A) such Indebtedness was not incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of with, or in anticipation of, such Permitted Sale Leaseback are used by Holdings or Acquisition and (B) such Restricted Subsidiary in accordance with Section 5.2(a)Indebtedness (other than pre-existing Attributable Indebtedness and Purchase Money Indebtedness) does not constitute indebtedness for borrowed money;
(evii) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), A) contingent liabilities in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for any indemnification, adjustment of purchase price, earnout or earn-out, non-compete, consulting, deferred compensation and similar obligations, in each case, obligations of the Borrower and its Subsidiaries incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, other than guarantees of Permitted Acquisitions and Dispositions and (B) Indebtedness incurred by any Person acquiring all the Borrower or any portion its Subsidiaries in a Permitted Acquisition or Dispositions under agreements providing for earn-outs or the adjustment of such business, assets the purchase price or a Subsidiary for the purpose of financing such acquisitionsimilar adjustments;
(gviii) Indebtedness arising from the honoring by a bank or other financial institution of Holdings to a Restricted Subsidiarycheck, draft or similar instrument drawn against insufficient funds in the ordinary course of business; 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 (A) such Indebtedness (except to another Borrower other than credit or another Restricted Subsidiarypurchase cards) shall be deemed, in each case to be an is extinguished within three Business Days of its incurrence of and (B) such Indebtedness not permitted by this clausein respect of credit or purchase cards is extinguished within 60 days from its incurrence;
(hix) Indebtedness representing deferred compensation to employees of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clauseBorrower and its Subsidiaries;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(kx) obligations in respect of self-insurance, performance, bidstay, appealcustoms, appeal and surety bonds and performance and completion guarantees and similar obligations provided by Holdings the Borrower or any Restricted a Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, the Borrower in the ordinary course of business or consistent with past practice;
(ixi) IndebtednessIndebtedness of the Borrower representing the obligation of the Borrower to make payments with respect to the cancellation or repurchase of certain Equity Interests of officers, Disqualified Stock employees or directors (or their estates) of the Borrower and preferred stock its Subsidiaries, to the extent permitted by Section 7.06(iv);
(xii) Indebtedness of Holdings the Borrower consisting of reimbursement obligations in connection with letters of credit obtained in the ordinary course of business; provided that the aggregate amount of all reimbursement obligations, contingent or any Restricted Subsidiary otherwise, may at no time exceed $2,000,000; and
(xiii) unsecured Indebtedness of the Borrower and its Subsidiaries not otherwise permitted by this Section 7.02 incurred after the Closing Date in an aggregate principal amount not to exceed $500,000 at any time outstanding; provided that (A) the credit documentation with respect to such Indebtedness shall not contain covenants or liquidation preference (together with default provisions relating to the Borrower or any Refinancing Indebtedness in respect thereof) up to 100% Subsidiary of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood Borrower that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, that such Refinancing Indebtedness (1) has a weighted average life to maturity at the time such Refinancing Indebtedness is incurred which is not less are more restrictive than the remaining weighted average life to maturity of covenants and default provisions contained in the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectivelyLoan Documents, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% no Default or Event of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that Default shall have occurred and be continuing immediately before and immediately after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theincurrence.
Appears in 1 contract
Sources: Credit Agreement (Inphonic Inc)
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issueassume or suffer to exist any Indebtedness, assumeexcept:
(a) Indebtedness arising under this Agreement or the Notes;
(b) Indebtedness of the Company to any Wholly Owned Subsidiary and of any Wholly Owned Subsidiary to the Company or any other Wholly Owned Subsidiary;
(c) Indebtedness outstanding on the date hereof and listed on Schedule 7.2 and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(d) Indebtedness of the Company to LLtd Corp II, guarantee or otherwise become liable, contingently or otherwise LLtd 1 S.à ▇.▇. and LLtd 2 S.à ▇.▇. (collectively, the “incur” and collectively, an “incurrenceInterim Financing Companies”) with in respect of loans made by any such Interim Financing Company to the Company from excess funds attributable to (i) Restricted Payments permitted under Section 7.8 or (ii) loans made by the Company to any such Interim Financing Company;
(e) secured Broker-Dealer Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares Indebtedness of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stockLazard Frères Banque; provided that Holdingsafter giving effect to the incurrence of any unsecured Indebtedness by Lazard Frères Bank permitted under this Section 7.2(e), the Borrowers aggregate of its unencumbered assets shall exceed the aggregate of its unsecured Indebtedness;
(f) Indebtedness of a Subsidiary acquired after the Effective Date or a corporation or other entity merged into or consolidated with the Company or any Subsidiary after the Effective Date and their Restricted Subsidiaries may incur Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case, exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event and where such acquisition, merger or consolidation is permitted by this Agreement and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness; provided that, immediately after giving effect to the acquisition or assumption of such Indebtedness (including Acquired other than Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness), the Company shall be in pro forma compliance with the financial covenant set forth in Section 7.1(a);
(g) Capital Lease Obligations in connection with the Paris Lease and any Indebtedness the net proceeds of which are used to refinance or issue shares replace such Capital Lease Obligations; provided that the principal amount of Disqualified Stocksuch Indebtedness does not exceed the value of the real property covered by the Paris Lease;
(h) additional Capital Lease Obligations in an aggregate principal amount not to exceed $20,000,000 at any one time outstanding;
(i) purchase money Indebtedness incurred by the Company or any Subsidiary prior to or within 270 days of the acquisition, lease or improvement of the respective asset permitted under this Agreement in order to finance such acquisition or improvement, and any Restricted Subsidiary may incur Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof in an aggregate principal amount not to exceed $25,000,000 at any one time outstanding;
(including Acquired Indebtedness), issue shares j) Indebtedness of Disqualified Stock the Company in respect of the Senior Notes and issue shares of preferred stock, (1) if any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness, Disqualified Stock ;
(k) Indebtedness in connection with Permitted Receivables Financings in an aggregate principal amount not to exceed $50,000,000 at any one time outstanding;
(l) Indebtedness in respect of letters of credit issued for the account of the Company or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted its Subsidiaries (including other than letters of credit issued as guaranties for Indebtedness of the Company and its Subsidiaries);
(m) Subordinated Indebtedness of the Company or any of its Subsidiaries;
(n) additional Indebtedness of the Company or any of its Subsidiaries in an aggregate principal amount (for the purposes of such calculation Company and all Subsidiaries) not to exceed $200,000,000 at any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations)one time outstanding; provided that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such additional Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis Company shall be in pro forma compliance with the Liens on financial covenant set forth in Section 7.1(a);
(o) Guarantee Obligations of the Collateral securing Company and its Subsidiaries in respect of Indebtedness of the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Company or its Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to so long as the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00permitted under this Agreement; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:and
(ap) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to onSpecified Non-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Recourse Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 1 contract
Sources: Credit Agreement (Lazard LTD)
Limitation on Indebtedness. Holdings will not5.3.1 For so long as any Notes remain Outstanding, the Company shall not Incur, and will shall not permit any Restricted Subsidiary to createIncur, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) unless no Event of Default has occurred and Holdings will is continuing and the Net Debt to EBITDA Ratio determined as of the date of the Incurrence of the Indebtedness shall not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in exceed 3.5:1.
5.3.2 Notwithstanding the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdingsforegoing, the Borrowers Company and their Restricted its Subsidiaries may incur Indebtedness (including Acquired the following Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is :
(i) unsecured or (ii) is secured by assets that do not become CollateralIndebtedness the proceeds of which are used to refinance the Notes, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such other Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Company Outstanding on the date hereof, any Indebtedness permitted by Restricted Subsidiaries Clause 5.3.1 above, or any Indebtedness permitted by this Clause 5.3.2, provided that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toeither:
(a) such Indebtedness arising under is Indebtedness of the Company subject to the Debt Optimization Agreement and refinances the Original Credit Documents;Agreements; or
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing the Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), Incurred does not exceed the greater principal amount of the Indebtedness refinanced plus reasonable premium, fees and expenses, and the Indebtedness Incurred (x) $550,000,000 and does not mature prior to the final Stated Maturity of the Indebtedness refinanced, (y) 50.0% of Consolidated EBITDA for has a ranking no greater than the most recently ended Test Period Indebtedness refinanced, and (calculated on a Pro Forma Basisz) at is not secured to any greater extent than, or by any assets or revenues other than those securing, the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Indebtedness refinanced;
(eii) Indebtedness incurred of the Company owed to and held by Holdings or any Restricted a Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insuranceCompany;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(hiii) Indebtedness of a Restricted Subsidiary owing of the Company owed to Holdings and held by the Company or another Restricted Subsidiary; provided that if any other Subsidiary of the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clauseCompany;
(iiv) shares any guarantee by a Subsidiary of preferred stock Indebtedness of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clausethe Company;
(jv) Hedging Obligations (excluding Agreements with respect to Indebtedness permitted under Clause 5.3.2(i) above, provided that such Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, Agreements are in the ordinary course of business or consistent with past practiceand not for speculative purposes;
(ivi) IndebtednessIndebtedness of Star One and the Company, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary pursuant to the Second Amendment to the Credit Agreement provided that such Indebtedness is Incurred to make payments in an aggregate principal amount or liquidation preference (together connection with any Refinancing Indebtedness in respect thereof) up to 100% the construction of the net cash proceeds received by Holdings since immediately after satellite and is within the Closing Date from maximum amount of the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings credit (as provided for in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any such Second Amendment as of its Subsidiariesdate of original signature); and
(vii) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary Indebtedness not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred to be Incurred pursuant to this clause Clauses 5.3.2(i) to (l)(ii), does not at any one time outstanding exceed the greater of (xvi) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoingcovenant which, together with any outstanding amounts incurred by Restricted Subsidiaries that are other Indebtedness Incurred pursuant to this Clause 5.3.2(vii), has an aggregate principal amount, or in the case of Indebtedness issued at a discount, an accreted amount at such time, not Guarantors under in excess of US$125,000,000 (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basisits equivalent in any currency or currencies) at the any time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theOutstanding.
Appears in 1 contract
Sources: First Supplemental Indenture (Brazilian Telecommunication CO Embratel)
Limitation on Indebtedness. Holdings The Borrower will not, and will not permit any of the Restricted Subsidiary to Subsidiaries to, create, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) (x) Indebtedness arising under the Credit DocumentsDocuments (including any Indebtedness incurred pursuant to Section 2.14), (y) Indebtedness arising under the ABL Facility and any Permitted Receivables Financing in an aggregate principal amount not to exceed at any time outstanding the sum of $4,500,000,000 and the portion of the Free and Clear Amount that the Borrower has elected to apply to increase capacity under this clause (a)(y) to the extent such commitments and/or loans are not otherwise reduced or terminated and any modification, replacement, refinancing, refunding, renewal, defeasance or extension of any Indebtedness arising under the ABL Facility and any Permitted Receivables Financing and, in each case, any Indebtedness incurred to so modify, replace, refinance, refund, renew, defease or extend such Indebtedness and, except to the extent otherwise expressly permitted hereunder, the principal amount of any such modification, replacement, refinancing, refunding, renewal, defeasance or extension does not exceed the principal amount thereof outstanding immediately prior to such modification, replacement, refinancing, refunding, renewal or extension except by an amount equal to the unpaid accrued interest and premium thereon plus other reasonable amounts paid and fees and expenses incurred in connection with such modification, replacement, refinancing, refunding, renewal or extension; provided that the Borrower shall give the Administrative Agent prompt written notice of any increase in the aggregate amount committed in respect of the ABL Facility, and (z) intercompany Indebtedness of Restricted Subsidiaries, and any Guarantee Obligations in respect thereof, to allocate the Borrower’s cost of borrowing to such Subsidiaries with respect to Indebtedness referred to in subclauses (x) and (y) or in respect of Indebtedness incurred following the Fourth Restatement Effective Date by the Borrower;
(b) Subject to compliance with Section 10.5, Indebtedness represented by of the Unsecured Asset Sale Bridge (including Borrower or any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 Restricted Subsidiary owed to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings Borrower or any Restricted Subsidiary; provided that, in each case, all such Indebtedness of any Credit Party owed to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment any Person that is used or useful not a Credit Party shall be subordinated in a Similar Business, whether through the direct purchase right of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject payment to the foregoing limitation so long as the proceeds Obligations of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Credit Party on customary terms;
(eA) Indebtedness incurred by Holdings or in respect of any Restricted Subsidiary (including bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities and discounted bills of exchange or the discounting or factoring of receivables for credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued management purposes, in each case entered into or undertaken in the ordinary course of business), business (including (i) in respect of workers’ workers compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims, (ii) any bank guarantees, letters of credit or similar facilities by any Governmental Authority or to satisfy any governmental or regulatory requirements, (iii) any tenders, statutory obligations, surety and appeal bonds, bids, leases, governmental contracts, performance and return-of-money bonds and other similar obligations incurred in the ordinary course of business or consistent with past practices and (iv) Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance) and (B) Indebtedness supported by a letter of credit issued pursuant to credit facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(fd) subject to compliance with Section 10.5, Guarantee Obligations incurred by (i) Restricted Subsidiaries in respect of Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary Borrower or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided Subsidiaries that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing is not prohibited to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness incurred under this Agreement (except to another the extent of any express restriction on Guarantee Obligations relating to such Indebtedness provided for herein) and (ii) the Borrower or another in respect of Indebtedness of Restricted SubsidiarySubsidiaries that is not prohibited to be incurred under this Agreement; provided that, except as provided in clauses (j) and (k) below, there shall be deemed, in each case to be an incurrence of such Indebtedness not permitted no guarantee by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausea Credit Party;
(e) Guarantee Obligations (i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, incurred in the ordinary course of business in respect of obligations of (or consistent with past practiceto) suppliers, customers, franchisees, lessors and licensees or (ii) otherwise constituting Investments permitted by Sections 10.5(e), 10.5(g), 10.5(i) or 10.5(q);
(f) (i) Indebtedness, Disqualified Stock Indebtedness (including Indebtedness arising under Capital Leases and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereofpurchase money indebtedness) up to 100% incurred within one year of the net cash proceeds received by Holdings since immediately after acquisition, purchase, construction, repair, replacement, expansion or improvement of fixed or capital assets to finance the Closing Date from acquisition, purchase, construction, repair, replacement, expansion or improvement of such fixed or capital assets (whether through the issue direct purchase of assets or sale the Stock of Equity Interests of Holdings or cash contributed to the capital of Holdings any Person owning such assets), (ii) Indebtedness arising under Capital Leases entered into in each caseconnection with Permitted Sale Leasebacks and (iii) Indebtedness arising under Capital Leases, other than Excluded Contributions(x) Capital Leases in effect on or prior to March 31, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries2021 and (y) as determined Capital Leases entered into after March 31, 2021 and in accordance with Sections 10.5(a)(iii)(B) effect on the Fourth Restatement Effective Date and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied set forth on Schedule 10.1 and Capital Leases entered into pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments subclauses (other than Permitted Investments specified in clauses (a) and (c) of the definition thereofi) and (ii) Indebtednessabove; provided, Disqualified Stock or preferred stock that the aggregate amount of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and Indebtedness incurred pursuant to this clause subclause (l)(ii), does not iii) at any one time outstanding shall not exceed the greater of (x) $825,000,000 500,000,000 and (y) 75.05% of Consolidated EBITDA for the most recently ended recent Test Period for which Section 9.1 Financials have been delivered, and (calculated on a Pro Forma Basisiv) at any modification, replacement, refinancing, refunding, renewal or extension of any Indebtedness specified in subclause (i), (ii) or (iii) above and any Indebtedness incurred to so modify, replace, refinance, refund, renew, defease or extend such Indebtedness; provided that, except to the time extent otherwise expressly permitted hereunder, the principal amount of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock Indebtedness incurred pursuant to this clause subclause (l)(iiiv) shall cease does not exceed the principal amount thereof outstanding immediately prior to be deemed such modification, replacement, refinancing, refunding, renewal or extension except by an amount equal to the unpaid accrued interest and premium thereon plus other reasonable amounts paid and fees and expenses incurred in connection with such modification, replacement, refinancing, refunding, renewal or outstanding for purposes extension;
(i) other than Indebtedness described in subclause (ii) of this clause (l)(iig), Indebtedness (including any unused commitment) but shall be deemed (x) outstanding on or prior to March 31, 2021 and (y) incurred for after March 31, 2021 and outstanding on the purposes of Fourth Restatement Effective Date and set forth on Schedule 10.1, (ii) Indebtedness existing on the first paragraph of this Section 10.1 from Fourth Restatement Effective Date and after owed by the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings Borrower or any Restricted Subsidiary to the Borrower or any Restricted Subsidiary, and any Guarantee Obligations in respect thereof, but only for so long as such Indebtedness or any refinancing, refunding or renewal thereof permitted by this subclause (ii) is held by the Borrower, such Restricted Subsidiary or a Credit Party and, in the case of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under each of the first paragraph of this Section 10.1 and clauses preceding subclauses (bi) and (cii), any modification, replacement, refinancing, refunding, renewal, defeasance or extension thereof (including any unused commitment) aboveand any Indebtedness incurred to so modify, clause replace, refinance, refund, renew, defease or extend such Indebtedness (l)(ior, in the case of subclause (ii) andonly, any intercompany transfer of creditor positions in respect thereof pursuant to intercompany debt restructurings); provided that all such Indebtedness arising as a result of any such transfer of creditor positions as contemplated by subclause (ii) of any Credit Party owed to any Person that is not a Credit Party shall be subordinated to the Obligations of such Credit Party on customary terms; provided, further, that, except to the extent otherwise expressly permitted hereunder, in the case of any such modification, replacement, refinancing, refunding, renewal, defeasance or extension (but not any such transfer of creditor positions), (x) the original aggregate principal amount thereof does not exceed the aggregate principal amount thereof outstanding immediately prior to such modification, replacement, refinancing, refunding, renewal, defeasance or extension except by an amount equal to any accrued interest and premium thereon plus other reasonable amounts paid and fees and expenses incurred in connection with such modification, replacement, refinancing, refunding, renewal. defeasance or extension, or paid in respect of such Indebtedness, (y) the direct and contingent obligors with respect to such Indebtedness are not changed (except that any Credit Party may also be made an obligor thereunder), and (z) except in the case of a refinancing of Indebtedness pursuant to subclause (ii), or any customary bridge facility so long as the long-term debt into which such customary bridge facility is to be converted satisfies the provisions of this clause (m) and clause z), either (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”I) such IndebtednessIndebtedness has the same or later final maturity and, Disqualified Stock except in the case of Revolving Credit Commitments, the same or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 longer remaining weighted average life to maturity of than the Indebtedness, Disqualified Stock or preferred stock Indebtedness being refinanced, refinanced (2) except to the extent of nominal amortization) or (II) no portion of such Refinancing refinancing Indebtedness refinances matures prior to the Final Maturity Date (determined as of the date such Indebtedness is incurred);
(h) Indebtedness in respect of Hedge Agreements;
(i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence Credit Parties in an aggregate principal amount at any one time outstandingoutstanding not to exceed $2,000,000,000;
(1) Indebtedness of a Person or Indebtedness attaching to assets of a Person that, in either case, becomes a Restricted Subsidiary (or (yis a Restricted Subsidiary that survives a merger with such Person) Persons or Indebtedness attaching to assets that are acquired by Holdings the Borrower or any Restricted Subsidiary Subsidiary, in each case after the Closing Date as the result of a Permitted Acquisition or merged into or consolidated with Holdings or Investment not prohibited hereby; provided that (w) such Indebtedness existed at the time such Person became a Restricted Subsidiary or at the time such assets were acquired and, in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisitioneach case, mergerwas not created in anticipation thereof, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theand
Appears in 1 contract
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising of the Borrower or any Guarantor under the Credit Documentsany Loan Document;
(b) Indebtedness represented by outstanding on the Unsecured Asset Sale Bridge (including date hereof and listed on Schedule 8.2 and any guarantee thereof) in refinancings, refundings, renewals or extensions thereof on terms and conditions reasonably acceptable to the aggregate amount not to exceed €500,000,000Administrative Agent;
(c) (i) Indebtedness (including any unused commitment) outstanding on of the Closing Date listed on Schedule 10.1 Borrower under Interest Rate Protection Agreements entered into in the ordinary course of business of the Borrower and not for speculative purposes, in each case having terms and conditions reasonably satisfactory to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)Administrative Agent;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary Borrower under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Commodity Hedging Agreements permitted under subsection 8.16;
(e) Indebtedness of the Borrower issued or owed to any Wholly-Owned Subsidiary which is a Guarantor (other than Indebtedness incurred by Holdings at any time when a Default or Event of Default shall have occurred and be continuing) and Indebtedness of any Restricted Wholly-Owned Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect which is a Guarantor issued or owed to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance Borrower or surety bonds, health, disability or to any other employee benefits or property, casualty or liability insurance or selfWholly-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insuranceOwned Subsidiary which is a Guarantor;
(f) Subordinated Indebtedness arising from agreements that is issued on terms which are satisfactory to the Administrative Agent and the Required Lenders with respect to provisions regarding maturity, interest rate, covenants, events of Holdings or a Restricted Subsidiary providing for indemnificationdefault and subordination language, adjustment provided that after giving effect to the issuance of purchase pricesuch Subordinated Indebtedness, earnout or similar obligations, the Borrower is in each case, incurred or assumed in connection compliance with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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 acquisitioncovenants contained in subsection 8.1 hereof;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not Guarantee Obligations permitted by this clausesubsection 8.4;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums)finance the acquisition of equipment or other assets, defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of such Indebtedness (does not exceed the purchase price of such equipment or other than Acquired Indebtedness)assets, Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under as applicable; and
(i) the first paragraph of this Section 10.1 or (ii) clause (c) Indebtedness of the definition Borrower and its Wholly-Owned Subsidiaries created, incurred or assumed after the date hereof not otherwise permitted pursuant to this subsection 8.2, provided that the aggregate outstanding principal amount of Permitted Other such Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence 10,000,000 at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 1 contract
Limitation on Indebtedness. Holdings Neither the Borrower nor any Subsidiary of the Borrower will not, and will not permit incur or be obligated on any Restricted Subsidiary to create, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock either directly or shares indirectly, by way of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the ObligationsGuarantee, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock suretyship or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations)otherwise, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is other than:
(i) unsecured or Unsecured trade accounts payable and normal accruals incurred in the ordinary course of business which are not yet due and payable;
(ii) is secured Indebtedness evidenced by the Notes;
(iii) Indebtedness in existence on the date hereof and listed on Schedule 7.2(a) attached hereto;
(iv) Indebtedness incurred in the ordinary course of business in connection with the acquisition of Property by Borrower (excluding Indebtedness assumed on any capital assets that do not become Collateral, either (A) the Consolidated Total Debt acquired pursuant to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecuredan Permitted Acquisition), after giving effect to the incurrence of provided that such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater value of the Property so acquired, and in any event, such purchase money Indebtedness shall not exceed Ten Million Dollars (x$10,000,000.00) $550,000,000 and (y) 50.0% of Consolidated EBITDA for in the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documentsaggregate;
(bv) Secured Indebtedness represented assumed by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by Borrower or a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a an Permitted Sale Leaseback Acquisition which, in the aggregate, shall not be subject exceed Ten Million Dollars ($10,000,000.00), provided that any Lien securing such Indebtedness shall attach only to the foregoing limitation so long as the proceeds of Property securing such Permitted Sale Leaseback are used Indebtedness prior to its assumption, or unsecured Indebtedness assumed by Holdings Borrower or such Restricted a Subsidiary in accordance connection with Section 5.2(a);
(e) an Permitted Acquisition or any other unsecured Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect all of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each casewhich, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantorsaggregate, shall not exceed the greater of Five Million Dollars (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary5,000,000.00); and
(vi) Subordinated Debt incurred in connection with an Permitted Acquisition not to exceed Five Million Dollars ($5,000,000.00) in the aggregate, provided that after giving effect to any such acquisitionSubordinated Debt is unsecured, merger, consolidation or designation described and the holder of such Subordinated Debt has executed a subordination and standby agreement in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares favor of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) Holdings would be permitted to incur at least $1.00 of additional Indebtedness pursuant Agent and the Banks in form and substance acceptable to the Fixed Charge Coverage Ratio test set forth in the first paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings Agent and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theRequired Banks.
Appears in 1 contract
Sources: Credit Agreement (Shaw Group Inc)
Limitation on Indebtedness. Holdings The Borrower will not, and will not permit any of its Restricted Subsidiary Subsidiaries to create, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and Holdings the Borrower will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers Borrower and their its Restricted Subsidiaries may incur unsecured Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that that, only if the outstanding amount Payment Conditions are not satisfied, the final maturity of any such unsecured Indebtedness (including Acquired Indebtedness) shall not occur, and no such unsecured Indebtedness (including Acquired Indebtedness) shall require mandatory commitment reductions (other than Acquired Indebtedness)customary amortization payments) prior to, Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstandingLatest Maturity Date. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documents;
(bi) Indebtedness represented by the Unsecured Asset Sale Bridge Term Loan Facility and any guarantee thereof in an aggregate principal amount (including together with any Refinancing Indebtedness in respect thereof and all accrued interest, fees and expenses) not to exceed the sum of (A) $1,825,000,000 and (B) the Maximum Incremental Facilities Amount (as defined in the Term Loan Credit Agreement) as of the date of such incurrence and (ii) Indebtedness represented by the Existing ▇▇▇▇▇ Notes and Existing Senior Notes and any guarantee thereof) in the aggregate amount not to exceed €500,000,000; provided that such Existing ▇▇▇▇▇ Notes and Existing Senior Notes have been defeased;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Restatement Effective Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Restatement Effective Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings the Borrower or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings the Borrower or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings the Borrower or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the
Appears in 1 contract
Sources: Abl Credit Agreement (Academy Sports & Outdoors, Inc.)
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising under the Credit Documentsof any Loan Party pursuant to any Loan Document;
(b) Indebtedness represented by of the Unsecured Asset Sale Bridge (including Borrower to any guarantee thereof) in Subsidiary and of any Wholly Owned Subsidiary Guarantor to the aggregate amount not to exceed €500,000,000Borrower or any other Subsidiary;
(c) (i) Indebtedness (including including, without limitation, Capital Lease Obligations) secured by Liens permitted by Section 6.3(g) in an aggregate principal amount not to exceed $20,000,000 at any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)one time outstanding;
(d) Indebtedness outstanding on the Closing Date and listed on Schedule 6.2(d) and any refinancings, refundings, renewals or extensions thereof (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or without any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful increase in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings thereof or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to shortening of the foregoing limitation so long as the proceeds maturity of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(aany principal amount thereof);
(e) Indebtedness incurred Guarantee Obligations made in the ordinary course of business by Holdings the Borrower or any Restricted of its Subsidiaries of obligations of the Borrower or any Subsidiary Guarantor;
(i) Indebtedness of the Borrower in respect of the Senior Notes in an aggregate principal amount not to exceed $240,000,000, (ii) Guarantee Obligations of any Subsidiary Guarantor in respect of such Indebtedness and (iii) Indebtedness of the Borrower that refinances the Senior Notes and Guarantee Obligations of any Subsidiary Guarantor in respect of such refinancing Indebtedness; provided, that (A) the maturity date of such refinancing Indebtedness shall be no earlier than six months after the maturity date of the Tranche C Term Loans, (B) the terms of such refinancing Indebtedness, taken as a whole, shall not be materially less favorable to the Borrower and the Subsidiary Guarantors than the terms of the Senior Notes and (C) the principal amount of such refinancing Indebtedness does not exceed the principal amount of Senior Notes refinanced thereby;
(i) Indebtedness of the Borrower in respect of the Senior Subordinated Notes in an aggregate principal amount not to exceed $165,800,000, (ii) Guarantee Obligations of any Subsidiary Guarantor in respect of such Indebtedness; provided that, in the case of any Subsidiary Guarantor, such Guarantee Obligations are subordinated to the obligations of such Subsidiary Guarantor under the Guarantee and Collateral Agreement to the same extent as the obligations of the Borrower in respect of the Senior Subordinated Notes are subordinated to the Obligations and (iii) Indebtedness of the Borrower that refinances Senior Subordinated Notes and Guarantee Obligations of any Subsidiary Guarantor in respect of such refinancing Indebtedness; provided, that (A) such refinancing Indebtedness and Guarantee Obligations shall be subordinated to the obligations of the Borrower and the Subsidiary Guarantors under the Loan Documents to the same extent as the obligations of the Borrower and the Subsidiary Guarantors in respect of the Senior Subordinated Notes are subordinated, (B) the maturity date of such refinancing Indebtedness shall be no earlier than six months after the maturity date of the Tranche C Term Loans, (C) the terms of such refinancing Indebtedness, taken as a whole, shall not be materially less favorable to the Borrower and the Subsidiary Guarantors than the terms of the Senior Subordinated Notes and (D) the principal amount of such refinancing Indebtedness does not exceed the principal amount of the Senior Subordinated Notes refinanced thereby;
(h) Indebtedness of the Borrower or its Subsidiaries incurred to finance the acquisition (including, without limitation, by way of merger) of Capital Stock of any Person engaged in, or assets used or useful in, a business permitted pursuant to Section 6.15; provided that the Consolidated Fixed Charge Coverage Ratio for the Borrower’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred would have been at least 1.75:1.00, determined on a pro forma basis (including letter a pro forma application of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters the net proceeds therefrom), as if such Indebtedness had been incurred at the beginning of credit issued such four-quarter period;
(i) Indebtedness secured by Liens permitted by Section 6.3(l); provided, that the aggregate principal amount of such Indebtedness, plus the aggregate principal amount of Indebtedness permitted by Section 6.2(c), shall not at any time exceed $20,000,000 outstanding;
(j) Indebtedness of the Borrower or its Subsidiaries arising from the honoring by a bank or other financing institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(fk) Indebtedness of the Borrower or its Subsidiaries arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other PersonSubsidiary, other than guarantees the guaranties of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition;
; provided, however, that: (gi) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to not reflected on the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% balance sheet of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings Borrower or any of its Subsidiaries) as determined Subsidiaries (contingent obligations referred to in accordance with Sections 10.5(a)(iii)(B) a footnote to financing statements and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with reflected on the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does balance sheet will not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease be deemed to be deemed incurred or outstanding reflected on such balance sheet for purposes of this clause (l)(iii)) but and (ii) the maximum assumable liability in respect of all such Indebtedness shall be deemed incurred for at no time exceed the purposes gross proceeds including non-cash proceeds (the Fair Market Value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Borrower and its Subsidiaries in connection with such disposition;
(l) subordinated Indebtedness of the first paragraph Borrower or any of this Section 10.1 from its Subsidiaries in an aggregate principal amount at any time outstanding not to exceed $2,000,000 issued to directors, officers or employees of the Borrower or any of its Subsidiaries in connection with the redemption or purchase of Capital Stock that is not secured by any assets of the Borrower or any of its Subsidiaries, does not require cash payments prior to the stated maturity of the Senior Notes and after contains subordination terms reasonably acceptable to the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii))Administrative Agent;
(m) Indebtedness of the Borrower in the form of Senior Subordinated Notes in connection with the issuance of EIS or, if there are no EIS outstanding on the date of such issuance, the issuance of Borrower’s Class A common stock, (and in each case, the incurrence or issuance of the related guarantees in respect of such Senior Subordinated Notes by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiumsGuarantors), defeasance costs provided that (i) no Default or Event of Default has occurred and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, that such Refinancing Indebtedness (1) has a weighted average life to maturity is continuing at the time of such Refinancing Indebtedness is incurred which is not less than the remaining weighted average life to maturity of the Indebtedness, Disqualified Stock issuance or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligationswould be caused thereby, (ii) Disqualified Stock the ratio of the aggregate principal amount of such Senior Subordinated Notes over the number of additional shares of the Borrower’s Class A common stock issued contemporaneously therewith shall not exceed (A) the equivalent ratio with respect to the EIS outstanding immediately prior to such issuance, or preferred stock(B) if there are no EIS outstanding immediately prior to such issuance, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectivelythe equivalent ratio with respect to the EIS outstanding on the Closing Date, and (iii) Indebtedness subordinated the Borrower uses the proceeds of such issuance solely to repurchase shares of Class B common stock issued on or before the Obligations, such Refinancing Indebtedness is subordinated to Closing Date from holders thereof in accordance with the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a GuarantorSecurities Holders Agreement;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition Borrower consisting of outstanding Permitted Other Indebtedness by Restricted Subsidiaries that are not GuarantorsForeign Currency Letters of Credit, the Dollar Equivalent of which shall not exceed the greater $5,000,000 in aggregate principal amount as of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period recent Calculation Date; and
(calculated on a Pro Forma Basiso) other unsecured Indebtedness, not included in clauses (a) through (n) above, not to exceed $20,000,000 in an aggregate principal amount (or accreted value, as applicable) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 1 contract
Sources: Credit Agreement (B&G Foods, Inc.)
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue or allow any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising of the Loan Parties under the Credit Loan Documents;
(b) Indebtedness represented by of the Unsecured Asset Sale Bridge (including Borrower issued to any guarantee thereof) in Wholly-Owned Subsidiary and Indebtedness and preferred stock of any Wholly-Owned Subsidiary issued to the aggregate amount not to exceed €500,000,000Borrower or any other Wholly-Owned Subsidiary;
(c) (i) Indebtedness (including any unused commitment) outstanding on of the Closing Date listed on Schedule 10.1 to Borrower evidenced by the Disclosure Letter Senior Subordinated Notes and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)Permitted Subordinated Refinancing Debt, if any;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred Guarantee Obligations permitted by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)subsection 8.4;
(e) Indebtedness incurred by Holdings of the Borrower and its Wholly-Owned Subsidiaries existing on the Effective Date listed on Schedule 8.2, but not any extensions, renewals or any Restricted Subsidiary (including letter replacements of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurancesuch Indebtedness;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary under Interest Rate Protection Agreements entered into for the purpose of financing limiting interest rate risks and not for the purpose of speculation, provided that the obligations under such acquisitionagreements are related to payment obligations on Indebtedness otherwise permitted by the terms of this covenant;
(g) Indebtedness of Holdings to a Restricted Subsidiary; under Commodity Hedging Agreements provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations contracts were entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;for the purpose of limiting risks that arise in the ordinary course of business of the Borrower and its Subsidiaries and not for the purpose of speculation; and
(ih) Indebtedness, Disqualified Stock additional Indebtedness of the Borrower and preferred stock of Holdings or any Restricted Subsidiary its Wholly-Owned Subsidiaries not to exceed $10,000,000 in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 1 contract
Limitation on Indebtedness. Holdings will not(a) Incur, and will not permit any Restricted Subsidiary to createshall procure neither the Guarantor nor Palm Shipping will, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to incur any Indebtedness (including Acquired Indebtedness) excluding Indebtedness hereunder or in connection herewith to the Agents, the Security Trustee or the Lenders and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in Indebtedness existing on the case of Restricted Subsidiaries that are not Guarantors, preferred stockdate hereof; provided that Holdings, the Borrowers and their Restricted Guarantor or any of its Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations)if, after giving effect to the incurrence of such Indebtedness and the use receipt and application of the proceeds thereoftherefrom, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Interest Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, Guarantor would be at least 1.75:1.00 greater than 2:1. Notwithstanding the foregoing, the Guarantor may incur each and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) all of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply tofollowing:
(aI) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with such that the aggregate principal amount of all other Indebtedness, Disqualified Stock and preferred stock then the Indebtedness of the Guarantor outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), immediately after such incurrence does not exceed the greater aggregate principal amount of Indebtedness existing on the date hereof;
(xII) $550,000,000 and Indebtedness of the Guarantor to any Wholly-Owned Subsidiary;
(yIII) 50.0% of Consolidated EBITDA for Indebtedness issued in exchange for, or the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the net proceeds of such Permitted Sale Leaseback which are used by Holdings to refinance or such Restricted Subsidiary refund, outstanding Indebtedness of the Guarantor, other than Indebtedness incurred under clauses (I) or (V) of this paragraph and any refinancings thereof, in accordance with Section 5.2(aan amount not to exceed the principal amount so exchanged, refinanced or refunded (plus premiums, accrued and unpaid interest, fees and expenses thereon);
(eIV) Indebtedness incurred by Holdings (A) in respect of performance, surety or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued appeal bonds provided in the ordinary course of business), (B) under Currency Agreements and Interest Rate Agreements; provided that, in respect the case of workers’ Currency Agreements that relate to other Indebtedness, such Currency Agreements do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation claimspayable thereunder, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
and (fC) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout price or similar obligations, or from Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Guarantor pursuant to such agreements, in each case, any case incurred or assumed in connection with the acquisition or 45 disposition of any business, assets or a Subsidiary or other Personof the Guarantor and not exceeding the gross proceeds therefrom, other than guarantees Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, business or assets or a Subsidiary of the Guarantor for the purpose of financing such acquisition;
(gV) Indebtedness in connection with the acquisition of Holdings to a Restricted any new Wholly owned Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemedthat, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in with respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(iiClause 9.1(B)(iii)(a)(V), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisitionthe Incurrence thereof, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) Holdings would be permitted to the Guarantor could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of this Section 10.1 Clause 9.1(B)(iii)(a); and -------- (VI) Indebtedness of Palm Shipping incurred in the ordinary course of the operation of vessels or Indebtedness of Palm Shipping to the Guarantor resulting from advances to Palm Shipping by the Guarantor made in the ordinary course of business;
(2b) For purposes of determining any particular amount of Indebtedness under this Clause 9.1(B)(iii), guarantees or obligations with respect to letters of credit supporting Indebtedness otherwise included in the Fixed Charge Coverage Ratio determination of Holdings such particular amount shall not be included. For purposes of determining compliance with this Clause, (i) in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness described above in this Clause, the Guarantor, in its sole discretion, shall classify such item of Indebtedness and only be required to include the Restricted Subsidiaries is equal to or greater than that immediately prior to amount and type of such acquisition, merger, consolidation or designation, Indebtedness in one of such clauses and (ii) either the amount of Indebtedness issued at a price that is less than the principal amount thereof shall be equal to the amount of the liability in respect thereof determined in conformity with GAAP. Notwithstanding any other provision of this Clause, the maximum amount of Indebtedness that the Guarantor may incur pursuant to this Clause shall not be deemed to be exceeded due solely to fluctuations in the exchange rates of currencies.
(1c) if The Guarantor shall not incur any Indebtedness that is expressly subordinated to any other Indebtedness of the Guarantor unless such Indebtedness, Disqualified Stock by its terms or shares the terms of preferred stock any agreement or instrument pursuant to which such Indebtedness is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligationsissued or remains outstanding, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal is also expressly made subordinate to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares Indebtedness of preferred stock is secured by a Lien on the Collateral on a junior priority basis with Guarantor under the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theGuaranty.
Appears in 1 contract
Limitation on Indebtedness. Holdings will The Borrower shall not, and will shall not permit any Restricted Subsidiary to of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, suffer to exist, guarantee or otherwise become liable, contingently directly or otherwise (collectively, “incur” and collectively, an “incurrence”) indirectly liable with respect to any Indebtedness (including Acquired IndebtednessDebt) or any Synthetic Leases and Holdings will the Borrower shall not issue any shares of Disqualified Stock Interests and will shall not permit any Restricted Subsidiary of its Subsidiaries to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided provided, however, that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, Borrower and any Restricted Subsidiary of the Borrower may incur create, incur, issue, assume, suffer to exist, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness (including Acquired Indebtednessor any Synthetic Lease to the extent that the Leverage Ratio is maintained in accordance with Section 6.12(a), issue shares of Disqualified Stock both before and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted SubsidiarySynthetic Lease, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; , and, provided, further, that any subsequent transfer (x) the aggregate principal amount of any such Indebtedness (except to Holdings or another Restricted Subsidiary1) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging all Capitalized Lease Obligations and all Synthetic Lease Obligations (excluding Hedging other than Capitalized Lease Obligations entered into for speculative purposes);
(k) obligations and Synthetic Lease Obligations in respect of selfGrowth-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(iRelated Capital Expenditures) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received Borrower and its Subsidiaries and (2) all Indebtedness for which the Borrower and any Subsidiary of the Borrower become liable in connection with Acquisitions of retail propane businesses in favor of the sellers of such businesses and secured by Holdings since immediately after any Lien on any property of the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings Borrower or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have , shall not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not exceed $65,000,000 at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% the principal amount of Consolidated EBITDA any Indebtedness for which the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that Borrower or any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes Subsidiary of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees Borrower becomes liable in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity with Acquisitions of retail propane businesses in favor of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent sellers of such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, businesses shall not exceed the greater fair market value of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theso acquired.
Appears in 1 contract
Sources: Short Term Revolving Credit Agreement (Ferrellgas Partners Finance Corp)
Limitation on Indebtedness. Holdings will not, and will Borrower shall not permit any Restricted Subsidiary to create, incur, issue, assume, guarantee suffer to exist, or otherwise become liable, contingently becOD;lC or otherwise (collectively, “incur” and collectively, an “incurrence”) remain directly or indirectly liable with respect to any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries except (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such a) Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Loan Documents;
, (b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not consisting of Contingent Obligations permitted pursuant to exceed €500,000,000;
Section 7.08; (c) Indebtedness under the Existing Credit Agreement and other Indebtedness in favor of third parties (i) Indebtedness on terms and conditions first offered to Lenders which Leriders has. declined to provide to Borrower within ten (including any unused commitment10) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and Business Days of notice thereof; (ii) intercompany Lenders have consented to such Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations)trom such third party lender, Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback which consent shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectivelyunreasonably withheld, and (iii) such Indebtedness subordinated shall be subject to an intercreditor agreement between Lenders and any such third party lender on terms and conditions reasonably satisfactory to Lenders ("Alternative Finandngs") provided that, (A) Lenders' prior consent shall not be required in the event Bon-ower arranges financing which pays in full at one time all of Borrower's Obligations and (B) in the event Borrower proposes to drill any future well ("Proposed Well") on the Oil and Properties constituting a portion of the Collateral, to the Obligationsextent such Proposed Well is properly permitted, conforms with existing spacing rules, and is not a replacement, reworking, redriI1ing or sidetrack of the existing well bore of any wells constituting a portion of the Collateral, in the event Lender declines to provide such Refinancing Indebtedness is subordinated to financing and BOlTower finds Alternative Financing, Borrower can require a release of the Obligations at least to the same extent Mortgage Property insofar as the Indebtedness being Refinanced lands and l~es included within pro ration unit sUlTounding the Proposed Wen and Lender shall deliver a release as.to such Proposed Well within ten (310) shall not include IndebtednessBusiness Days.ofBoITower's request (provided periods, Disqualified Stock if any, whether at stated maturity or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiaryotherwise; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at commences any one time outstandingInsolvency Proceeding with respect to itself, or (yiii) Persons that are acquired by Holdings takes any action to effectuate or authorize any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with of the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary)foregoing; provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theor
Appears in 1 contract
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising of the Borrower under the Credit Documentsthis Agreement;
(b) Indebtedness represented by of the Unsecured Asset Sale Bridge (including Borrower to any guarantee thereof) in Guarantor and of any Guarantor to the aggregate amount not to exceed €500,000,000Borrower or any other Guarantor;
(c) Indebtedness of the Borrower and any of its Subsidiaries incurred to finance the acquisition of fixed or Capital Assets (iwhether pursuant to a loan, a Capital Lease or otherwise) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 in an aggregate principal amount not exceeding as to the Disclosure Letter Borrower and (ii) intercompany Indebtedness (including its Subsidiaries $10,000,000 at any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)time outstanding;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to onshort-balance sheet term Indebtedness of Holdings or such Restricted Subsidiary, Foreign Subsidiaries owed to third Persons other than the Borrower and its Subsidiaries incurred for working capital purposes in an aggregate principal amount whichamount, when aggregated together with the principal aggregate amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred investments made pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (dSection 7.11(h), does not exceed the greater of (x) exceeding as to such Foreign Subsidiaries $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) 15,000,000, at the any time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)outstanding;
(e) Indebtedness incurred outstanding on the date hereof and listed on Schedule 7.02 and any refinancings, refundings, renewals or extensions thereof; provided that the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by Holdings an amount equal to a reasonable premium or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business)other reasonable amount paid, and fees and expenses reasonably incurred, in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness connection with respect such refinancing and by an amount equal to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insuranceany existing commitments unutilized thereunder;
(f) Indebtedness arising from agreements of Holdings or a Restricted corporation which becomes a Subsidiary providing for indemnificationafter the date hereof, adjustment of purchase price, earnout or similar obligations, provided that (i) such Indebtedness existed at the time such corporation became a Subsidiary and was not created in each case, incurred or assumed in connection with anticipation thereof and (ii) immediately after giving effect to the acquisition or disposition of any business, assets or a Subsidiary or other Person, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets corporation by the Borrower no Default or a Subsidiary for the purpose Event of financing such acquisitionDefault shall have occurred and be continuing;
(g) additional unsecured Indebtedness of Holdings to a Restricted Subsidiary; provided that the Borrower not exceeding $2,500,000 in aggregate principal amount at any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clauseone time outstanding;
(h) other Indebtedness of a Restricted the Borrower or any Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if incurred with the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not prior written consent of the Borrowers or a Guarantor, such Indebtedness is Administrative Agent and subordinated in right of payment to the Guarantee of such Guarantor as Indebtedness on terms satisfactory to the case may be; providedAdministrative Agent hereunder in its sole discretion, further, that and which shall not exceed $20,000,000 in aggregate principal amount at any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clauseone time outstanding;
(i) shares Indebtedness of preferred stock of a Restricted the Borrower or any Subsidiary issued to Holdings or another Restricted Subsidiaryunder any Swap Contracts; provided that any subsequent issuance (i) such obligations are (or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiarywere) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, such Person in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or consistent with past practiceproperty held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person, and not for purposes of speculation or taking a "market view;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) " and (ii) Indebtedness, Disqualified Stock or preferred stock such Swap Contracts do not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party;
(j) Indebtedness of Holdings or any Restricted Subsidiary not otherwise permitted hereunder the Borrower under the High Yield Bonds in an aggregate outstanding principal amount not to exceed $150,000,000, and Indebtedness of the Borrower used to refinance, refund, renew, extend or liquidation preferenceexchange the High Yield Bonds, which when aggregated including in connection with the principal amount any Exchange Offer; provided that (A) no Default or Event of Default exists and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) is continuing at the time of incurrence such refinancing, refunding, renewal or extension above or would be caused thereby, (it being understood that any IndebtednessB) the terms and conditions of the replacement notes and the documents evidencing such refinancing, Disqualified Stock refunding, renewal or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but extension shall be deemed incurred for in form and substance no more restrictive than this Agreement as reasonably agreed by the purposes Administrative Agent and (C) the principal amount of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, replacement notes shall not exceed the greater principal amount set forth above on the date of (A) $550,000,000 such refinancing plus an amount equal to a reasonable premium or other reasonable amount paid, and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstandingfees and expenses reasonably incurred, or (y) Persons that are acquired in connection with such refinancing and by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect amount equal to any such acquisitionexisting commitments unutilized thereunder; and
(k) without duplication, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares Indebtedness consisting of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) Holdings would be investments permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of this under Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the7.11.
Appears in 1 contract
Limitation on Indebtedness. Holdings ▇▇▇▇▇▇▇▇▇ will not, and nor will not it cause or permit any Restricted Subsidiary to createto, directly or indirectly, incur, issuecreate, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect permit to exist any Indebtedness except:
(including Acquired Indebtednessa) Indebtedness of ▇▇▇▇▇▇▇▇▇ and Holdings will not issue its Subsidiaries outstanding on the Closing Date and disclosed on Schedule 7.01 and any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock orextensions, in the case of Restricted Subsidiaries that are not Guarantors, preferred stockrenewals or refinancings thereof; provided that Holdings(i) the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder and (ii) the terms relating to principal amount, amortization, maturity, collateral (if any) and subordination (if any), and other material terms taken as a whole, of any such refinancing, refunding, renewing or extending Indebtedness, and of any agreement entered into and of any instrument issued in connection therewith, are no less favorable in any material respect to the Borrowers or the Lenders than the terms of any agreement or instrument governing the Indebtedness being refinanced, refunded, renewed or extended and their Restricted the interest rate applicable to any such extending, renewing or refinancing Indebtedness does not exceed the then applicable market interest rate;
(b) Indebtedness of the Borrowers under this Agreement and the other Loan Documents;
(c) Indebtedness consisting of obligations (contingent or otherwise) existing or arising under any interest rate Hedging Contract, provided that such obligations are (or were) entered into by ▇▇▇▇▇▇▇▇▇ or such Subsidiary in the ordinary course of business and not for purposes of speculation;
(d) (i) Indebtedness of ▇▇▇▇▇▇▇▇▇ and its Subsidiaries not otherwise permitted by this Section 7.01 incurred after the Closing Date in an aggregate principal amount not to exceed $600,000,000 at any time outstanding; provided that (A) up to $50,000,000 aggregate principal amount of such Indebtedness may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stockbe secured, (1B) if such Indebtedness, Disqualified Stock no Default or shares Event of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings Default shall have occurred and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), be continuing immediately before and immediately after giving effect to such incurrence and (C) upon giving effect on a pro–forma basis to the incurrence of such Indebtedness and to the use concurrent retirement of proceeds thereofany other Indebtedness of ▇▇▇▇▇▇▇▇▇ or any Subsidiary, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis ▇▇▇▇▇▇▇▇▇ shall be in compliance with the Liens on financial covenants set forth in Section 7.12; (ii) unsecured Indebtedness of ▇▇▇▇▇▇▇▇▇ that is not Guaranteed by any Subsidiary other than the Collateral securing Subsidiary Borrowers and which such Indebtedness (and any Subsidiary Borrower’s guarantee thereof) is subordinated in right and time of payment to the Obligations, either ; and (Aiii) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock which is only exchangeable or shares convertible into unsecured, subordinated Indebtedness of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or ▇▇▇▇▇▇▇▇▇ as contemplated in sub-clause (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) this Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a7.01(d);
(e) Purchase Money Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter Capital Leases) of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters ▇▇▇▇▇▇▇▇▇ and its Subsidiaries incurred after the Closing Date; provided that (i) such Indebtedness is issued and any Liens securing such Indebtedness are created concurrently with, or within 180 days after, the acquisition of credit issued in the ordinary course asset financed and (ii) such Indebtedness does not exceed the cost of business)the property being acquired on the date of the acquisition, in respect plus any related costs of workers’ compensation claims, deferred compensation, performance the acquisition or surety bonds, health, disability or other employee benefits or financing of such property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;; and
(f) Indebtedness arising from agreements of Holdings or a Restricted (i) ▇▇▇▇▇▇▇▇▇ owed to any Subsidiary providing for indemnificationof ▇▇▇▇▇▇▇▇▇, adjustment and (ii) any Subsidiary of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings ▇▇▇▇▇▇▇▇▇ owed to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock ▇▇▇▇▇▇▇▇▇ or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed▇▇▇▇▇▇▇▇▇, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, extent such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph provisions of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the7.03.
Appears in 1 contract
Limitation on Indebtedness. Holdings will notThe Borrower shall not create, incur, assume or suffer to exist any Indebtedness, and will shall not permit any Restricted Subsidiary of its Subsidiaries to create, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligationsexcept, the Consolidated First Lien Secured Debt subject to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations)Section 6.19, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply tofor:
(a) Indebtedness arising created hereunder and under the Credit DocumentsNotes;
(b) Indebtedness represented (not referred to in any other clause of this Section 6.2) of the Borrower or any of its Subsidiaries secured by Liens permitted with respect to the Unsecured Asset Sale Bridge (including any guarantee thereof) in Borrower or its Subsidiaries by Section 6.3; provided that the aggregate amount of any such Indebtedness that is not to rated as investment grade by at least one of Standard & Poor's Ratings Services and ▇▇▇▇▇'▇ Investors Service, Inc. and not rated with at least the highest non-investment grade ranking by the other such rating agency shall not exceed €500,000,000$100,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding under the Existing Credit Agreement in an aggregate principal amount not exceeding $318,150,000, less the principal amount of mandatory repayments and prepayments made thereunder from time to time on and after the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)Date;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)[Intentionally Omitted];
(e) Indebtedness incurred of a Person which becomes a Subsidiary after the date hereof, provided that (i) such Indebtedness existed at the time such Person became a Subsidiary and was not created in anticipation thereof and (ii) immediately after giving effect to the acquisition of such Person by Holdings the Borrower or any Restricted existing Subsidiary no Default shall have occurred and be continuing;
(including letter f) unsecured Indebtedness of credit obligations consistent with past practice constituting reimbursement obligations with respect any Subsidiary owing to the Borrower or any other wholly-owned Subsidiary or secured Indebtedness of any Subsidiary that is not a wholly-owned Subsidiary owing to the Borrower or any wholly-owned Subsidiary;
(g) the License Fee Guaranties and the Junior Subordinated Notes, in amounts in existence on the Existing Credit Agreement Closing Date;
(h) Indebtedness (i) under any Interest Rate Agreement required by the Existing Credit Agreement, (ii) evidenced by performance bonds or letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance business or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect thereof, (iii) evidenced by a letter of selfcredit facility related to insurance associated with claims for work-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings related injuries or any Restricted Subsidiary or obligations in respect of letters of credit, (iv) for bank guarantees or similar instruments related thereto, in each case, overdrafts incurred in the ordinary course of business or consistent with past practicethat are promptly repaid;
(i) Indebtednesstrade credit incurred to acquire goods, Disqualified Stock supplies, services and preferred stock incurred in the ordinary and normal course of Holdings or business;
(j) Capitalized Lease Obligations of the Borrower and its Subsidiaries in an aggregate amount not exceeding $50,000,000 between the Existing Credit Agreement Closing Date and the Maturity Date, inclusive;
(k) all deferred taxes (where such deferral is otherwise permitted under the terms of this Agreement and under applicable law); and
(l) Non-Recourse Indebtedness of Newco to USA Broadcasting created under any Restricted Subsidiary AT Note in an aggregate principal amount or liquidation preference not to exceed the lesser of (together with any Refinancing Indebtedness in respect thereofi) up to 100% the portion of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed purchase price allocable to the capital Capital Stock of Holdings (in each caseSubsidiary of USA Broadcasting acquired by Newco with the Net Proceeds of such AT Note, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) 1.3 of the definition thereof) Second Amendment to the USA Acquisition Agreement, as in effect on the date hereof, and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the835,000,000.
Appears in 1 contract
Limitation on Indebtedness. Holdings will The Borrower shall not, and will shall not permit any Restricted Subsidiary to of its Subsidiaries to, create, incur, issue, assume, guarantee suffer to exist, or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) remain directly or indirectly liable with respect to to, any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising under the Credit Documentsincurred pursuant to this Agreement;
(b) so long as no Event of Default has occurred and is continuing at the time of the incurrence thereof or after giving effect thereto, Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) consisting of Contingent Obligations in the aggregate amount not to exceed €500,000,000respect of obligations of other Persons;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed identified on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)7.04;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock so long as no Event of Default has occurred and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) continuing at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings the incurrence thereof or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) after giving effect thereto, Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), business in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness connection with respect to reimbursement or indemnification type Capital Leases and purchase money Indebtedness.
(e) obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insuranceunder Swap Contracts entered into for hedging purposes;
(f) Indebtedness arising of the Borrower and its Subsidiaries having a maturity of 92 days or less representing borrowings from agreements of Holdings a bank or banks with which the Borrower or such Subsidiary has a Restricted depository relationship, which borrowings shall be fully secured by Cash Equivalents purchased by the Borrower or such Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion proceeds of such business, assets or a Subsidiary for the purpose of financing such acquisitionborrowings;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, incurred in the ordinary course of business or consistent in connection with past practicerelocation service transactions and secured by properties which are the subject to such transactions;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings Indebtedness incurred by the Borrower or any Restricted a Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make fund a Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) Acquisition and (ii) Indebtedness, Disqualified Stock or preferred stock Indebtedness of Holdings or any Restricted a Person that becomes a Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferenceafter the Effective Date pursuant to a Permitted Acquisition, which when aggregated with Indebtedness existed prior to such Acquisition and was not created in contemplation thereof;
(i) Indebtedness under the principal amount Public Debentures;
(j) so long as no Event of Default has occurred and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) is continuing at the time of incurrence thereof or after giving effect thereto, unsecured Indebtedness of the Borrower;
(it being understood that any Indebtednessk) so long as no Event of Default has occurred and is continuing at the time of incurrence thereof, Disqualified Stock other secured or preferred stock incurred pursuant to this clause unsecured Indebtedness of the Borrower and its Subsidiaries, provided the aggregate principal amount of such Indebtedness (l)(iiexcluding Indebtedness of Strategic Investment Subsidiaries and their respective Subsidiaries permitted under Section 7.04(o)) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for not exceed at the purposes time of the first paragraph incurrence of this Section 10.1 from and after any thereof 10% of Net Worth as of the first date on which Holdings or end of the fiscal quarter immediately preceding any such Restricted incurrence;
(l) obligations consisting of guarantees of any Subsidiary could have incurred of Indebtedness of insurance agents of an Insurance Subsidiary in an aggregate amount not to exceed at the time of the incurrence of any thereof 3% of Net Worth as of the end of the fiscal quarter immediately preceding such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii))incurrence;
(m) Indebtedness of the incurrence or issuance by Holdings Borrower owing to any Subsidiary and of any Subsidiary owing to the Borrower or any Restricted Subsidiary other Subsidiary, provided that, in the case of IndebtednessIndebtedness of the Borrower owing to any Subsidiary, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph payment of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 subordinate to the remaining weighted average life to maturity payment of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) Obligations in a manner satisfactory to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a GuarantorAdministrative Agent;
(n) IndebtednessNon-Recourse Debt of the Designated Subsidiaries;
(o) Indebtedness of the Strategic Investment Subsidiaries and their respective Subsidiaries, Disqualified Stock which Indebtedness may be secured by assets of the Strategic Investment Subsidiaries or preferred stock any of (x) Holdings their respective Subsidiaries, provided in no event shall the owner of such Indebtedness have any recourse, directly or a Restricted Subsidiary incurred indirectly, to the Borrower or issued to finance an acquisition, merger, or consolidation or to facilitate the designation any of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness its Subsidiaries (other than Acquired Indebtedness), Disqualified Stock the Strategic Investment Subsidiaries and preferred stock that may be incurred pursuant to the foregoing, together with their respective Subsidiaries) or any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under of their respective assets;
(ip) the first paragraph so long as no Event of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 Default has occurred and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) is continuing at the time of incurrence at any one time outstandingthereof, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Synthetic Lease Obligations, provided the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio aggregate Attributable Indebtedness in respect thereof shall not exceed at the time of the incurrence of any thereof 3% of Net Worth as of the end of the fiscal quarter immediately preceding such incurrence;
(calculated on q) so long as no Event of Default has occurred and is continuing at the time of incurrence thereof, Indebtedness arising in connection with a Pro Forma BasisPermitted Accounts Securitization; and
(r) shall be either any extensions, renewals or refinancings (Abut not increases) less than or equal to of the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theforegoing.
Appears in 1 contract
Sources: Term Loan Credit Agreement (Fidelity National Financial, Inc.)
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising of the Borrower or any Subsidiary under the Credit Documentsthis Agreement or any other Loan Document;
(b) existing Indebtedness represented by of the Unsecured Asset Sale Bridge (including Borrower and its Subsidiaries listed on Schedule 8.2 and any guarantee Refinancing Indebtedness in respect thereof) in the aggregate amount not to exceed €500,000,000;
(c) Indebtedness of the Borrower to any Subsidiary of the Borrower, of any Domestic Subsidiary to the Borrower or to any other Subsidiary of the Borrower, provided that (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 such indebtedness is subordinated to the Disclosure Letter Loans under this Agreement, and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 such indebtedness is evidenced by a promissory note that is pledged to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)Administrative Agent in accordance with the Guarantee and Collateral Agreement;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock under sale and preferred stock incurred leaseback transactions permitted by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)subsection 8.12;
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect the Borrower under Hedge Agreements entered into solely to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurancehedge interest rate exposure and not for speculative purposes;
(f) Indebtedness arising from agreements of Holdings the Borrower or a Restricted any Subsidiary providing for indemnificationincurred to finance the acquisition, adjustment construction or improvement of purchase priceany fixed or capital assets, earnout or similar obligations, in each case, incurred or including obligations under Financing Leases and any Indebtedness assumed in connection with the acquisition or disposition of any business, such assets or secured by a Subsidiary Lien on any such assets prior to the acquisition thereof which Lien was not created in contemplation of such acquisition and on any extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided that (A) such Indebtedness is incurred prior to or other Person, other than guarantees within 120 days after such acquisition or the completion of such construction or improvement and (B) the aggregate principal amount of Indebtedness incurred permitted by this paragraph (f), and the aggregate amount of sale-leaseback transactions permitted under subsection 8.12 theretofore consummated, shall not exceed $25,000,000 at any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisitiontime outstanding;
(g) Indebtedness of Holdings to any Person that becomes a Restricted SubsidiarySubsidiary after the date hereof; 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 (A) such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (except to another Borrower or another Restricted SubsidiaryB) shall be deemed, in each case to be an incurrence the aggregate principal amount of such Indebtedness not permitted by this clauseparagraph (g) shall not exceed $10,000,000 at any time outstanding;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemedForeign Subsidiaries, in each case addition to be an incurrence of such Indebtedness not permitted by this clauseparagraph (i), in an aggregate amount not in excess of $25,000,000 at any time outstanding;
(i) shares Indebtedness of preferred stock of a Restricted any Foreign Subsidiary issued to Holdings the Borrower or another Restricted any other Subsidiary; provided that (A) the aggregate principal amount of Indebtedness of Holland & ▇▇▇▇▇▇▇ to the Borrower and the Domestic Subsidiaries, taken together with guarantees of obligations of Holland & ▇▇▇▇▇▇▇ permitted under subsection 8.4(h) and investments in Holland & ▇▇▇▇▇▇▇ permitted under subsection 8.9(d), shall not exceed $35,000,000 at any subsequent issuance or transfer time outstanding], and (B) the aggregate principal amount of Indebtedness of Foreign Subsidiaries other than Holland & ▇▇▇▇▇▇▇ to the Borrower and the Domestic Subsidiaries, taken together with guarantees of obligations of Foreign Subsidiaries other than Holland & ▇▇▇▇▇▇▇ permitted under subsection 8.4(g) and investments in Foreign Subsidiaries other than Holland & ▇▇▇▇▇▇▇ permitted under subsection 8.9(d), shall not exceed $20,000,000 at any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clausetime outstanding;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);Refinancing Indebtedness incurred in order to refinance in whole or in part the Obligations; and
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary other unsecured Indebtedness in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not exceed $30,000,000 at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 1 contract
Sources: Credit Agreement (Nbty Inc)
Limitation on Indebtedness. Holdings ▇▇▇▇▇▇▇▇▇ will not, and nor will not it cause or permit any Restricted Subsidiary to createto, directly or indirectly, incur, issuecreate, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect permit to exist any Indebtedness except:
(including Acquired Indebtednessa) Indebtedness of ▇▇▇▇▇▇▇▇▇ and Holdings will not issue its Subsidiaries outstanding on the Closing Date and disclosed on Schedule 7.01 and any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock orextensions, in the case of Restricted Subsidiaries that are not Guarantors, preferred stockrenewals or refinancings thereof; provided that Holdings(i) the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder, (ii) the terms relating to principal amount, amortization, maturity, collateral (if any) and subordination (if any), and other material terms taken as a whole, of any such refinancing, refunding, renewing or extending Indebtedness, and of any agreement entered into and of any instrument issued in connection therewith, are no less favorable in any material respect to the Borrowers or the Lenders than the terms of any agreement or instrument governing the Indebtedness being refinanced, refunded, renewed or extended and their Restricted the interest rate applicable to any such extending, renewing or refinancing Indebtedness does not exceed the then applicable market interest rate and (iii) the existing letters of credit listed on Schedule 7.01 may only be extended, renewed or refinanced with Letters of Credit issued under this Agreement;
(b) Indebtedness of the Borrowers under this Agreement and the other Loan Documents;
(c) Indebtedness of ▇▇▇▇▇▇▇▇▇ and its Subsidiaries not otherwise permitted by this Section 7.01 incurred after the Closing Date in an aggregate principal amount not to exceed $350,000,000 at any time outstanding; provided that (i) up to $25,000,000 aggregate principal amount of such Indebtedness may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stockbe secured, (1ii) if such Indebtedness, Disqualified Stock no Default or shares Event of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings Default shall have occurred and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), be continuing immediately before and immediately after giving effect to such incurrence and (iii) upon giving effect on a pro–forma basis to the incurrence of such Indebtedness and to the use concurrent retirement of proceeds thereofany other Indebtedness of ▇▇▇▇▇▇▇▇▇ or any subsidiary, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis ▇▇▇▇▇▇▇▇▇ shall be in compliance with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00financial covenants set forth in Section 7.12; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);and
(d) Purchase Money Indebtedness of ▇▇▇▇▇▇▇▇▇ and its Subsidiaries incurred after the Closing Date; provided that (including Capitalized Lease Obligations)i) such Indebtedness is issued and any Liens securing such Indebtedness are created concurrently with, Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiarywithin 90 days after, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion acquisition of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet asset financed, (ii) such Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater cost of (x) $550,000,000 and (y) 50.0% the property being acquired on the date of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time acquisition, plus any related costs of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion financing of such business, assets or a Subsidiary for the purpose of financing such acquisition;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theproperty.
Appears in 1 contract
Limitation on Indebtedness. Holdings will The Borrower shall not, and will shall not permit any Restricted Subsidiary to of its Subsidiaries to, create, incur, issue, assume, guarantee suffer to exist, or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) remain directly or indirectly liable with respect to to, any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising under the Credit Documentsincurred pursuant to this Agreement;
(b) so long as no Default or Event of Default has occurred and is continuing at the time of the incurrence thereof or after giving effect thereto, Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) consisting of Contingent Obligations in the aggregate amount not to exceed €500,000,000respect of obligations of other Persons;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed identified on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)7.04;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock so long as no Default or Event of Default has occurred and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) continuing at the time of incurrence; provided that Capitalized Lease Obligations the incurrence thereof or after giving effect thereto, Indebtedness incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in the ordinary course of business in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Capital Leases and purchase money Indebtedness;
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insuranceObligations under Swap Contracts entered into for hedging purposes;
(f) Indebtedness arising of the Borrower and its Subsidiaries having a maturity of 92 days or less representing borrowings from agreements of Holdings a bank or banks with which the Borrower or such Subsidiary has a Restricted depository relationship, which borrowings shall be fully secured by Cash Equivalents purchased by the Borrower or such Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion proceeds of such business, assets or a Subsidiary for the purpose of financing such acquisitionborrowings;
(g) Indebtedness Obligations incurred in the ordinary course of Holdings business in connection with relocation service transactions and secured by properties which are the subject to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausetransactions;
(h) Indebtedness incurred by the Borrower or a Subsidiary to fund a Permitted Acquisition and Indebtedness of a Restricted Person that becomes a Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if after the Borrowers or a Guarantor incur such Indebtedness owing Closing Date pursuant to a Restricted Subsidiary that is Permitted Acquisition, which Indebtedness existed prior to such Acquisition and was not the Borrowers or a Guarantor, such Indebtedness is subordinated created in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausecontemplation thereof;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clauseIndebtedness under the Public Debentures;
(j) Hedging Obligations so long as no Default or Event of Default has occurred and is continuing at the time of incurrence thereof or after giving effect thereto, unsecured Indebtedness of the Borrower; provided that such Indebtedness (excluding Hedging Obligations entered into i) shall have a stated maturity of no earlier than September 15, 2018, (ii) shall not have any scheduled principal payments or provide for speculative purposesany mandatory prepayments or redemptions or repurchases not otherwise provided to the Lenders hereunder prior to September 15, 2018 (other than (A) by way of acceleration after default or (B) in respect of, or upon, the conversion or mandatory prepayment of Convertible Indebtedness); and (iii) has covenants, defaults and other terms and conditions (other than interest rates and change of control or “fundamental change” provisions) no more restrictive (when taken as a whole) than those contained in this Agreement; provided further that the net cash proceeds from any such Indebtedness shall be used to prepay Revolving Loans, if any, that are outstanding at the time the Borrower receives such net cash proceeds (without a mandatory corresponding reduction in the Aggregate Commitments) (it being understood that (I) nothing in this proviso prohibits the Borrower from making any Borrowing subsequent to or substantially simultaneous with such prepayment if otherwise permitted by, and in accordance with, the terms of this Agreement and (II) “mandatory prepayment” with respect to Convertible Indebtedness includes, and the “stated maturity” of Convertible Indebtedness does not include, the repurchase of Convertible Indebtedness by the Borrower at the option of the creditor of such Convertible Indebtedness (whether upon the occurrence of specified events or conditions, on specified dates or otherwise));
(k) obligations in respect so long as no Default or Event of self-insurance, performance, bid, appeal, Default has occurred and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) is continuing at the time of incurrence thereof, other secured or unsecured Indebtedness of the Borrower and its Subsidiaries, provided the aggregate principal amount of such Indebtedness (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(iiexcluding Indebtedness of Strategic Investment Subsidiaries and their respective Subsidiaries permitted under Section 7.04(o)) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for not exceed at the purposes time of the first paragraph incurrence of this Section 10.1 from and after any thereof 10% of Net Worth as of the first date on which Holdings or end of the fiscal quarter immediately preceding any such Restricted incurrence;
(l) obligations consisting of guarantees of any Subsidiary could have incurred of Indebtedness of insurance agents of an Insurance Subsidiary in an aggregate amount not to exceed at the time of the incurrence of any thereof 3% of Net Worth as of the end of the fiscal quarter immediately preceding such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii))incurrence;
(m) Indebtedness of the incurrence or issuance by Holdings Borrower owing to any Subsidiary and of any Subsidiary owing to the Borrower or any Restricted Subsidiary other Subsidiary, provided that, in the case of IndebtednessIndebtedness of the Borrower owing to any Subsidiary, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph payment of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 subordinate to the remaining weighted average life to maturity payment of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) Obligations in a manner satisfactory to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a GuarantorAdministrative Agent;
(n) IndebtednessNon-Recourse Debt of the Designated Subsidiaries;
(o) Indebtedness of the Strategic Investment Subsidiaries and their respective Subsidiaries, Disqualified Stock which Indebtedness may be secured by assets of the Strategic Investment Subsidiaries or preferred stock any of (x) Holdings their respective Subsidiaries, provided in no event shall the owner of such Indebtedness have any recourse, directly or a Restricted Subsidiary incurred indirectly, to the Borrower or issued to finance an acquisition, merger, or consolidation or to facilitate the designation any of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness its Subsidiaries (other than Acquired Indebtedness)the Strategic Investment Subsidiaries and their respective Subsidiaries) or any of their respective assets;
(p) Synthetic Lease Obligations under the Permitted Synthetic Lease and, Disqualified Stock so long as no Default or Event of Default has occurred and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) is continuing at the time of incurrence at any one time outstandingthereof, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the other Synthetic Lease Obligations, provided the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio aggregate Attributable Indebtedness in respect of all of the foregoing shall not exceed at the time of the incurrence of any thereof 3% of Net Worth as of the end of the fiscal quarter immediately preceding such incurrence;
(calculated on q) so long as no Default or Event of Default has occurred and is continuing at the time of incurrence thereof, Indebtedness arising in connection with a Pro Forma BasisPermitted Accounts Securitization; and
(r) shall be either any extensions, renewals or refinancings (Abut not increases) less than or equal to of the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theforegoing.
Appears in 1 contract
Sources: Credit Agreement (Fidelity National Financial, Inc.)
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising of the Borrower under the Credit Documentsthis Agreement;
(b) Indebtedness represented by of Pinnacle Towers and its Subsidiaries permitted under the Unsecured Asset Sale Bridge (including any guarantee thereof) in Pinnacle Towers Credit Agreement prior to the aggregate amount not to exceed €500,000,000Permitted Securitization;
(c) Indebtedness, other than as permitted pursuant to clauses (ib) Indebtedness and (including any unused commitmentd) of this Section 7.01, of the Excluded Subsidiaries outstanding on the Closing Date listed on Schedule 10.1 date hereof, and any refinancings, refundings, renewals or extensions thereof; provided that the principal amount of such Indebtedness outstanding at any time after giving effect to any such refinancing, refunding, renewal or extension shall not exceed an amount equal to the Disclosure Letter outstanding principal amount of such Indebtedness immediately prior to giving effect to any such refinancing, refunding, renewal or extension plus an amount equal to a reasonable premium or other reasonable amount paid, and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)fees and expenses reasonably incurred, in connection with such refinancing, refunding or renewal;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings of the Borrower or any Restricted SubsidiarySubsidiary of the Borrower to the Borrower or any Subsidiary of the Borrower, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment provided that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock such Indebtedness of any Person owning such assets directly owned Subsidiary to the Borrower is evidenced by an Intercompany Note and Indebtedness arising from pledged to the conversion Administrative Agent for the benefit of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock Lenders and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject subordinated to the foregoing limitation so long as Obligations on terms and conditions reasonably satisfactory to the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Required Lenders;
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent in connection with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurancePermitted Securitization;
(f) Indebtedness arising from agreements any Indebtedness, the aggregate principal amount of Holdings or a Restricted Subsidiary providing for indemnificationwhich shall not exceed $2,500,000 at any time outstanding, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, other than guarantees of Indebtedness incurred pursuant to an Acquisition by any Person acquiring all Pinnacle Towers or any portion of such business, assets or a Subsidiary for its Subsidiaries prior to the purpose of financing such acquisitionPermitted Securitization;
(g) Indebtedness of Holdings to a Restricted Subsidiaryany Guarantee Obligation permitted under Section 7.03; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;and
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment earnouts payable to the Guarantee of such Guarantor as the case may be; provided, further, that seller party in connection with any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clauseAcquisition;
(i) shares any Indebtedness of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted SubsidiaryPinnacle Towers Limited and its Subsidiaries permitted under the Parent Guarantee; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;and
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) ▇▇▇▇ ▇▇▇▇▇ Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 1 contract
Sources: Credit Agreement (Global Signal Inc)
Limitation on Indebtedness. Holdings will (a) Parent shall not and shall not permit any of the Restricted Subsidiaries to Incur any Indebtedness (including Acquired Indebtedness and Construction Indebtedness) if, immediately after giving effect to the Incurrence of such additional Indebtedness and the receipt and application of the proceeds therefrom, the aggregate principal amount of all outstanding Indebtedness of the Restricted Subsidiaries on a consolidated basis would be greater than 65% of their Adjusted Total Assets.
(b) Parent shall not, and will shall not permit any of the Restricted Subsidiary Subsidiaries to, Incur any Secured Indebtedness (including Acquired Indebtedness and Construction Indebtedness) if, immediately after giving effect to createthe Incurrence of such additional Secured Indebtedness and the receipt and application of the proceeds therefrom, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise the aggregate principal amount of all outstanding Secured Indebtedness of the Restricted Subsidiaries on a consolidated basis would be greater than 45% of their Adjusted Total Assets.
(collectively, “incur” c) Parent shall not and collectively, an “incurrence”) with respect shall not permit any of the Restricted Subsidiaries to Incur any Indebtedness (including Acquired Indebtedness) and Holdings will not issue ); provided, however, that any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantorsmay Incur Indebtedness (including Acquired Indebtedness and Construction Indebtedness) if, preferred stockafter giving effect to the Incurrence of such Indebtedness and the receipt and application of the proceeds therefrom, the Interest Coverage Ratio of the Restricted Subsidiaries on a consolidated basis would be at least 2.0 to 1.0; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur amount of Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness Incurred by Restricted Subsidiaries that are not Subsidiary Guarantors shall not exceed in the aggregate 8.0% of Adjusted Total Assets of the Restricted Subsidiaries.
(d) Notwithstanding paragraph (a), (b) or (c) above, Parent or any of the Restricted Subsidiaries (except as specified below) may Incur each and all of the following:
(1) Indebtedness of Parent or any of the Restricted Subsidiaries outstanding under any Credit Facility at any time in an aggregate principal amount not to exceed the greater of (x) $550,000,000 1.8 billion and (y) 50.040% of Consolidated EBITDA for Adjusted Total Assets of Parent and the most recently ended Test Period Restricted Subsidiaries;
(calculated on a Pro Forma Basis2) at Indebtedness of Parent or any one time outstanding. The foregoing limitations will not apply of the Restricted Subsidiaries owed to:
(a) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and Issuers evidenced by an unsubordinated promissory note, or
(ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings Parent or any Restricted Subsidiary; provided, to finance the purchasehowever, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary of Parent or any subsequent transfer of such Indebtedness (other than to Parent or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case case, to be constitute an incurrence Incurrence of such Indebtedness not permitted by this clauseclause (2);
(h3) Indebtedness of a Parent or any of the Restricted Subsidiary owing to Holdings or another Restricted SubsidiarySubsidiaries under Interest Rate Agreements; provided that if such agreements (x) are designed primarily to protect Parent or any of the Borrowers Restricted Subsidiaries against fluctuations in foreign currency exchange rates or interest rates (whether fluctuations of fixed to floating rate interest or floating to fixed rate interest) and (y) do not increase the Indebtedness of the obligor outstanding at any time other than as a Guarantor incur such result of fluctuations in foreign currency exchange rates or interest rates or by reason of fees, indemnities and compensation payable thereunder;
(4) Indebtedness owing to a of Parent or any of the Restricted Subsidiary that is not the Borrowers or a GuarantorSubsidiaries, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as extent the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;net proceeds thereof are promptly:
(i) shares used to purchase Notes tendered in a Change of preferred stock Control Offer made as a result of a Restricted Subsidiary issued Change of Control Triggering Event,
(ii) used to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer redeem all of any Capital Stock or any other event which results the Notes pursuant to Section 5 of the Notes,
(iii) deposited to defease the Notes as described in any such Restricted Subsidiary ceasing Sections 8.02 and 8.03, or
(iv) deposited to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed discharge the obligations under the Notes and this Indenture as described in each case to be an issuance of such shares of preferred stock not permitted by this clauseSection 8.01;
(j5) Hedging Obligations Permitted Government Revenue Bond Indebtedness;
(excluding Hedging Obligations entered into for speculative purposes6) (i) Guarantees by the Parent of Indebtedness of an Issuer or any of the Subsidiary Guarantors; (ii) Guarantees of Indebtedness of Parent or an Issuer by any of the Subsidiary Guarantors; provided the guarantee of such Indebtedness is permitted by and made in accordance with Section 4.14; and (iii) Guarantees by a Subsidiary Guarantor of any Indebtedness of any other Subsidiary Guarantor;
(7) Indebtedness outstanding on the Issue Date (other than Indebtedness under the Credit Agreement (other than the Term B Loan) or Indebtedness represented by the Notes and the Guarantees);
(k8) Indebtedness represented by the Notes and the Guaranties issued on the Issue Date;
(9) Indebtedness consisting of obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, to pay insurance premiums Incurred in the ordinary course of business or consistent with past practicebusiness;
(i10) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereofof any bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities, and reinvestment obligations related thereto, entered into in the ordinary course of business;
(11) up to 100% Indebtedness in respect of workers’ compensation claims, unemployment or other insurance or self-insurance obligations, indemnities, bankers’ acceptances, performance, bid completion, return-of-money, appeal and surety bonds or guarantees and similar types of obligations in the net ordinary course of business;
(12) Indebtedness represented by cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale management obligations and other obligations in respect of Equity Interests of Holdings or cash contributed to the capital of Holdings (netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case, other than Excluded Contributions, any Cure Amount or proceeds case in connection with deposit accounts;
(13) Indebtedness supported by a letter of Disqualified Stock or sales of Equity Interests to Holdings credit procured by Parent or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to in a principal amount not in excess of the stated amount of such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares letter of preferred stock is secured by a Lien on credit and where the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall underlying Indebtedness would otherwise be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, thepermitted;
Appears in 1 contract
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising under in respect of the Loans, and other obligations of the Credit Parties under this Agreement and the other Loan Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including of Hanover or HCLP to any guarantee thereof) in the aggregate amount not of its Subsidiaries and of any such Subsidiary which is a Credit Party to exceed €500,000,000HCLP or any other Subsidiary of HCLP;
(c) (i) Indebtedness (including any unused commitment) outstanding on as of the Closing Date and listed on Schedule 10.1 to the Disclosure Letter 8.2(c) and (ii) intercompany any Refinancing Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)incurred in respect thereof;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement in respect of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrenceFinancing Leases; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall that, after giving effect thereto, Section 8.7 is not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)contravened;
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claimsSubordinated Debt, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other the terms and conditions of which have been approved in writing by the Agents and any Refinancing Indebtedness with incurred in respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurancethereof;
(f) Non-Recourse Indebtedness arising from agreements of Holdings or Unqualified Subsidiaries in an aggregate amount not to exceed $50,000,000 at any time, less the Dollar amount of any Permitted Credit Support that is included in the calculation of any other exception to this Section 8.2 or, with respect to any Permitted Credit Support constituting a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligationsGuarantee Obligation, in each case, incurred or assumed in connection with the acquisition or disposition calculation of any business, assets or a Subsidiary or other Person, 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 acquisitionexceptions to Section 8.4;
(g) Indebtedness of Holdings a Person which becomes a Subsidiary after the date hereof in an aggregate principal amount not exceeding as to a Restricted Subsidiary; Hanover and its Subsidiaries $20,000,000 at any time outstanding, provided that any subsequent issuance or transfer (i) such indebtedness existed at the time such Person became a Subsidiary and was not created in anticipation thereof and (ii) immediately after giving effect to the acquisition of any Capital Stock such Person by Hanover or any other event which results in any such Restricted Subsidiary ceasing to of its Subsidiaries no Default or Event of Default shall have occurred and be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausecontinuing;
(h) Indebtedness in respect of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Equipment Lease Tranche A Loans and any Refinancing Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated incurred in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clauserespect thereof;
(i) shares Indebtedness in respect of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that the 2008 Notes and any subsequent issuance or transfer of any Capital Stock or any other event which results Refinancing Indebtedness incurred in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clauserespect thereof;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes)Indebtedness of Hanover evidenced by the Hanover Zero Coupon Subordinated Notes and any Refinancing Indebtedness incurred in respect thereof;
(k) obligations Indebtedness of Hanover in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary 2003 Notes in an aggregate principal amount or liquidation preference not to exceed $275,000,000 (together with provided that any net proceeds received from the issuance of the 2003 Notes in excess of $200,000,000 shall be used to prepay the 2000A Synthetic Lease and/or the 2000B Synthetic Lease) and any Refinancing Indebtedness incurred in respect thereof;
(l) up Guarantee Obligations permitted by Section 8.4;
(m) Indebtedness of Hanover evidenced by the Hanover Convertible Notes in an aggregate principal amount not to 100% exceed $150,000,000 and any Refinancing Indebtedness incurred in respect thereof;
(n) Indebtedness of Hanover or HCLP in an aggregate principal amount not to exceed the net cash proceeds received by Holdings since immediately after amount required to repurchase the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed Equipment subject to the capital of Holdings an Equipment Lease (described in each caseclause (i), other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b(ii) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (ciii) of the definition thereof) and pursuant to the purchase option set forth in Section 20 of such Equipment Lease, provided that the proceeds of such Indebtedness are used solely to purchase such Equipment pursuant to such purchase option (iithe “Equipment Lease Refinancing”);
(o) Investments permitted to be made pursuant to Section 8.10 in the form of Indebtedness;
(p) to the extent constituting Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise obligations under Derivatives permitted hereunder under Section 8.9; and
(q) Indebtedness secured by Liens permitted by subsection 8.3(s) in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant not to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence 25,000,000 at any one time outstanding, or ;
(yr) Persons that are acquired Indebtedness assumed by Holdings HCLP or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) Holdings would be permitted to incur at least $1.00 of additional Indebtedness its Subsidiaries pursuant to the Fixed Charge Coverage Ratio test set forth Permitted International Reorganization and any Refinancing Indebtedness incurred in respect thereof; and
(s) unsecured Indebtedness not otherwise permitted by clauses (a)-(r) above not exceeding $40,000,000 in the first paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theaggregate at any time outstanding.
Appears in 1 contract
Limitation on Indebtedness. Holdings None of the Group Companies will notincur, and will not permit any Restricted Subsidiary to create, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect permit to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Swap Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) of the Group Companies outstanding on the Closing Date listed and of Point and its Subsidiaries outstanding immediately after consummation of the Acquisition, in each case as disclosed on Schedule 10.1 to 7.01 (collectively, the Disclosure Letter “Existing Indebtedness”), and any Permitted Refinancing of any of the foregoing;
(ii) intercompany Indebtedness of the Loan Parties under this Agreement and the other Finance Documents;
(including any unused commitmentiii) outstanding on (A) Purchase Money Indebtedness and Attributable Indebtedness in respect of Capital Leases and Synthetic Lease Obligations of the Borrower and its Restricted Subsidiaries incurred after the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance Capital Expenditures; provided that (1) the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing such Purchase Money Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), or Attributable Indebtedness does not exceed the greater of (x) $550,000,000 40,000,000 and (y) 50.05% of Consolidated EBITDA for Net Tangible Assets as of the last day of the most recently ended Test Period (calculated on a Pro Forma Basis) at the time recent period of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary four consecutive fiscal quarters in respect of which financial statements have been delivered pursuant to this clause Section 6.01, in each case at any time outstanding, (d2) such Purchase Money Indebtedness or Attributable Indebtedness is issued and any Liens securing such Purchase Money Indebtedness or Attributable Indebtedness are created concurrently with, or within 180 days after, the acquisition of the asset financed and (3) no Lien securing such Purchase Money Indebtedness or Attributable Indebtedness shall extend to or cover any property or asset of any Group Company other than the asset so financed, and (B) Attributable Indebtedness in connection with a Permitted Sale respect of Sale/Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used Transactions permitted by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)7.10;
(eiv) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, other than guarantees of Indebtedness incurred by Permitted Business Acquisition and any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition;
(g) Indebtedness of Holdings to a Restricted SubsidiaryPermitted Refinancing thereof; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results such Indebtedness was not incurred in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance contemplation of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurancePermitted Business Acquisition, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or the only obligors with respect to any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and Indebtedness incurred pursuant to this clause (l)(iiiv) shall be those Persons who were obligors of such Indebtedness immediately prior to such Permitted Business Acquisition (or in the case of a purchase of assets, the purchaser of such assets), does not at any one time outstanding exceed the greater of (iii) (x) $825,000,000 both immediately prior and after giving effect to the assumption of such Indebtedness, no Event of Default shall have occurred and be continuing and (y) 75.0% immediately after giving effect to the assumption of Consolidated EBITDA for such Indebtedness on a Pro-Forma Basis, the Borrower shall be in compliance with the Interest Coverage Ratio set forth in Section 7.12(b), as of the last day of the most recently ended Test Period (calculated on a Pro Forma Basis) at the time recent period of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred four consecutive fiscal quarters in respect of which financial statements have been delivered pursuant to this clause (l)(ii) shall cease to be deemed incurred Section 6.01 which precedes or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for ends on the purposes date of the first paragraph incurrence of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided further that the aggregate amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by of Restricted Subsidiaries that are not Guarantors outstanding under (i) the first paragraph of this Section 10.1 or (ii) clause (civ) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, together with clause (v) shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence 50,000,000 at any one time outstanding, or ;
(yv) Persons that are acquired by Holdings Indebtedness of the Borrower or any Restricted Subsidiary issued or merged into or consolidated with Holdings or incurred to finance a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary)Permitted Business Acquisition and any Permitted Refinancing thereof; provided that (1) the terms of such Indebtedness do not provide for any scheduled repayment, mandatory redemption or sinking fund obligation prior to the date that is 91 days after the Latest Maturity Date, other than customary offers to purchase upon a change of control, asset sale or Casualty or Condemnation event and (2) both immediately prior and after giving effect to the incurrence or issuance of any such acquisitionIndebtedness and such Permitted Business Acquisition on a Pro-Forma Basis, mergerno Event of Default shall have occurred and be continuing, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) Holdings would be permitted to incur at least $1.00 of additional Indebtedness pursuant and the Borrower shall have delivered to the Fixed Charge Coverage Ratio test set forth in the first paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior Administrative Agent a Pro-Forma Compliance Certificate demonstrating that, upon giving effect to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral Permitted Business Acquisition on a pari passu basis Pro-Forma Basis, the Borrower shall be in compliance with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Total Leverage Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, thespecified in Section
Appears in 1 contract
Limitation on Indebtedness. Holdings Neither the Borrower nor any Subsidiary of the Borrower will not, and will not permit incur or be obligated on any Restricted Subsidiary to create, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock either directly or shares indirectly, by way of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the ObligationsGuarantee, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock suretyship or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations)otherwise, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is other than:
(i) unsecured or Indebtedness evidenced by the Notes;
(ii) is secured Unsecured trade accounts payable and normal accruals incurred in the ordinary course of business which are not yet due and payable;
(iii) Indebtedness incurred in the ordinary course of business in connection with the acquisition of Property by Borrower (excluding Indebtedness assumed on any capital assets that do acquired pursuant to an Acceptable Acquisition) which shall not become Collateral, either exceed at any one time Ten Million Dollars (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured$10,000,000.00), after giving effect to the incurrence of provided that any such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater value of the Property so acquired;
(xiv) $550,000,000 and The following categories of Indebtedness, all of which, in the aggregate, together with the payments permitted by Section 7.2(l) (yOperating Leases) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) shall not exceed at any one time outstanding. The foregoing limitations will not apply to:Twenty-Five Million Dollars ($25,000,000.00):
(aA) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) incurred in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement ordinary course of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) business in connection with the sale by Borrower of unsecured corporate notes, bonds or other unsecured commercial paper in any public or private offering; and
(B) Other unsecured Indebtedness assumed by Borrower or a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance connection with Section 5.2(a);
(e) an Acceptable Acquisition or any other unsecured Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;.
(fv) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, Subordinated Debt (y) incurred or assumed in connection with one or more Acceptable Acquisitions not to exceed in the acquisition or disposition of any business, assets or a Subsidiary or other Person, aggregate $20,000,000.00 and (z) incurred other than guarantees of Indebtedness in connection with an Acceptable Acquisition not to exceed in the aggregate $150,000,000.00 less any Subordinated Debt incurred by any Person acquiring in connection with an Acceptable Acquisition, provided that all or any portion such Subordinated Debt is unsecured, and the holder of such business, assets or Subordinated Debt has executed a Subsidiary for Subordination and Standby Agreement in favor of Agents and the purpose of financing such acquisition;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, Lenders substantially in the ordinary course form of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preferenceExhibit H attached hereto, which when aggregated with the principal amount Subordination and liquidation preference of all Standby Agreement shall, among other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of things: (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis Subordinated Debt was incurred in connection with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, thean Acceptable
Appears in 1 contract
Sources: Credit Agreement (Staffmark Inc)
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issueassume or suffer to exist any Indebtedness, assume, guarantee or otherwise become liable, contingently or otherwise except:
(collectively, “incur” and collectively, an “incurrence”a) with respect Indebtedness of any Loan Party created under any Loan Document;
(b) unsecured Indebtedness of the Borrower to any Indebtedness (including Acquired Indebtedness) Solvent Subsidiary and Holdings will not issue of any shares of Disqualified Stock and will not permit Wholly Owned Subsidiary Guarantor to the Borrower or any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stockother Solvent Subsidiary; provided that Holdingssuch Indebtedness is evidenced by, and subject to the terms and conditions of, the Borrowers Subordinated Intercompany Note and their Restricted is otherwise subordinated in right of payment to the Obligations under the Loan Documents on terms and conditions satisfactory to the Administrative Agent;
(c) Indebtedness of the Borrower and its Subsidiaries may incur (including, without limitation, Capital Lease Obligations) secured by Liens permitted by Section 7.3(g) which, when added to the outstanding Capital Lease Obligations permitted by Section 7.2(d), would not exceed the sum of $25,000,000 and the aggregate amount of Capital Lease Obligations permitted by Section 7.2(d) as of the Closing Date;
(d) Indebtedness (including Acquired Indebtednessother than the Indebtedness referred to in Section 7.2(f)) or issue shares of Disqualified Stock, the Borrower and its Subsidiaries outstanding on the date hereof and listed on Schedule 7.2(d) and any Restricted refinancings, refundings, renewals or extensions thereof (without any increase in the principal amount thereof or any shortening of the maturity of any principal amount thereof);
(e) unsecured Guarantee Obligations made in the ordinary course of business by the Borrower or any of its Subsidiaries of obligations of the Borrower or any Subsidiary may incur Guarantor;
(f) unsecured Indebtedness of the Borrower and WS Financing created under the Senior Note Indenture in respect of the Senior Notes in an aggregate principal amount not to exceed $280,000,000 and Guarantee Obligations of any Subsidiary Guarantor in respect of such Indebtedness and any Indebtedness refunding or refinancing such Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stockprovided that (i) such Indebtedness does not increase the principal amount thereof, (1ii) if such IndebtednessIndebtedness is issued on terms and conditions satisfactory to the Administrative Agent, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), iii) after giving effect to the incurrence of any such Indebtedness on a pro forma basis, as if such incurrence of Indebtedness had occurred on the first day of the twelve month period ending on the last day of the Borrower’s then most recently completed fiscal quarter, the Borrower and its Subsidiaries would have been in compliance with all the financial covenants set forth in Section 7.1 and the use Borrower shall have delivered to the Administrative Agent a certificate of its Chief Financial Officer to such effect setting forth in reasonable detail the computations necessary to determine such compliance and (iv) no Default or Event of Default exists and is continuing at the time of issuance thereof (both before and after giving effect thereto));
(g) unsecured Indebtedness evidenced by the Seller Notes in an aggregate original principal amount not to exceed $84,000,000, plus additions to the principal thereof resulting from the payment in kind of the interest thereon pursuant to the terms thereof;
(h) unsecured Indebtedness of TTPC consisting of deferred purchase price adjustments and similar obligations, in each case incurred pursuant to the Acquisition Documentation;
(i) unsecured subordinated Indebtedness of the Borrower and WS Financing and the unsecured subordinated guarantee by any Subsidiary Guarantor in respect of such Indebtedness; provided that (i) the proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00thereof are used to repay the Obligations hereunder, (2ii) if such Indebtedness, Disqualified Stock or shares of preferred stock Indebtedness is secured by a Lien issued on terms and conditions satisfactory to the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries Administrative Agent (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis subordination terms satisfactory to the Liens on Administrative Agent, a maturity date no earlier than the Collateral securing date which is six months after the Obligationsfinal maturity of the Loans hereunder and no mandatory prepayments, redemptions, defeasements or sinking fund payments until the Loans hereunder are paid in full), (iii) after giving effect to the incurrence of any such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis pro forma basis, as if such incurrence of Indebtedness had occurred on the first day of the twelve month period ending on the last day of TTPC’s then most recently completed fiscal quarter, TTPC and its Subsidiaries would not exceed 5.50:1.00 have been in compliance with all the financial covenants set forth in Section 7.1 and TTPC shall have delivered to the Administrative Agent a certificate of its Chief Financial Officer to such effect setting forth in reasonable detail the computations necessary to determine such compliance and (iv) no Default or Event of Default exists and is continuing at the time of issuance thereof (B) the Fixed Charge Coverage Ratio of Holdings both before and the Restricted Subsidiaries, after giving effect thereto);
(j) unsecured Indebtedness of the Borrower consisting of the WSSO Software Agreement;
(k) unsecured Indebtedness of any Excluded Foreign Subsidiary in an aggregate principal amount outstanding for all Excluded Foreign Subsidiaries not to exceed at any time $5,000,000 and unsecured Guarantee Obligations of the Borrower with respect thereto;
(l) unsecured Indebtedness in respect of performance bonds, bid bonds, appeal and surety bonds and other obligations of a like nature incurred in the ordinary course of business, including those incurred to secure health, safety and environmental obligations in the ordinary course of business, so long as the aggregate amount of deposits at any one time securing appeal bonds does not exceed $1,000,000;
(m) Indebtedness in an amount not to exceed $10,000,000 consisting of the guarantee provided by Worldspan for the ▇▇▇▇▇▇ County Bonds pursuant to the incurrence terms thereof; and
(n) additional unsecured Indebtedness of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and Borrower or any Guarantor in an aggregate principal amount (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect Borrower and all Guarantors) not to exceed $15,000,000 (which amount shall be reduced dollar for dollar by the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis7.2(k)) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documents;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 1 contract
Sources: Credit Agreement (Ws Financing Corp)
Limitation on Indebtedness. Holdings will not, and will not permit any Restricted Subsidiary to createCreate, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising in respect of the loans, and other obligations of the Guarantors under the Corporate Credit DocumentsAgreement and the other Loan Document as defined in the Corporate Credit Agreement;
(b) Indebtedness represented by the Unsecured Asset Sale Bridge (including of HCC to any guarantee thereof) in the aggregate amount not of its Subsidiaries and of any such Subsidiary which is a Guarantor to exceed €500,000,000HCC or any other Subsidiary of HCC;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Initial Closing Date and listed on on, Schedule 10.1 to the Disclosure Letter 11.2 and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)all extensions, renewals, replacements, refinancings and modifications thereof permitted hereunder;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or and any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, its Subsidiaries in an aggregate principal amount which, when aggregated with not to exceed $10,000,000 at any time outstanding which is recourse only to the principal amount assets of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings HCC or any Restricted Subsidiary pursuant to this clause (d) in connection Subsidiaries acquired or financed with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Indebtedness;
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claimsFinancing Leases provided that, deferred compensationafter giving effect thereto, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurancesubsection 11.7 is not contravened;
(f) Indebtedness arising from agreements in respect of Holdings or a Restricted Subsidiary providing for indemnificationSubordinated Debt, adjustment the terms and conditions of purchase pricewhich have been approved in writing by the Required Lenders and Investors and all extensions, earnout or similar obligationsrenewals, in each casereplacements, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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 acquisitionrefinancings and modifications thereof permitted hereunder;
(g) Indebtedness of Holdings to a Restricted SubsidiaryUnqualified Subsidiaries of Holdings; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clauseis Non-Recourse Indebtedness;
(h) Indebtedness of a Restricted Person which becomes a Subsidiary owing after the date hereof in an aggregate principal amount not exceeding as to Holdings or another Restricted Subsidiary; and its Subsidiaries $10,000,000 at any time outstanding, provided that if (i) such indebtedness existed at the Borrowers or time such Person became a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is and was not the Borrowers or a Guarantor, such Indebtedness is subordinated created in right of payment anticipation thereof and (ii) immediately after giving effect to the Guarantee acquisition of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Person by Holdings or another Restricted Subsidiary) any of its Subsidiaries no Default or Event of Default shall have occurred and be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausecontinuing;
(i) shares Indebtedness in respect of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted SubsidiaryEquipment Lease Tranche A Loans; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;and
(j) Hedging Obligations Indebtedness not contemplated by clauses (excluding Hedging Obligations entered into for speculative purposes);
(ka)-(i) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, above not exceeding $5,000,000 in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the.
Appears in 1 contract
Sources: Guarantee (Hanover Compressor Co /)
Limitation on Indebtedness. Holdings The Company will not, and will cause the Restricted Subsidiaries not permit any Restricted Subsidiary to to, directly or indirectly, create, incur, issue, assume, guarantee guarantee, suffer to exist or otherwise become directly or indirectly liable, contingently or otherwise with respect to, any Secured Indebtedness, except for the following, without duplication:
(A) Secured Indebtedness in respect of the Obligations;
(B) Secured Indebtedness existing as of the Issue Date (other than the Indebtedness described in clauses (A), (C) and (D));
(C) (i) Secured Indebtedness incurred pursuant to the Amended 2029 First Lien Notes Indenture; (ii) Secured Indebtedness incurred pursuant to the New 2029 First Lien Notes Indenture, in each case as in effect on the Issue Date; and (iii) Secured Indebtedness comprised of Additional Notes in aggregate principal amount of not more than US$2,500,000, which shall solely constitute Indebtedness incurred to refinance (as defined below) the 2025 Notes (including any premium, interest accrued and unpaid and/or any other amount payable thereon);
(D) Secured Indebtedness incurred pursuant to repayment obligations under the Total Solarization Agreement and any Secured Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to refinance or refund, replace, exchange, renew, repay, redeem, defease, discharge or extend, in full or in part, such repayment obligations (including premiums, accrued interest, fees and expenses), in an amount not to exceed the amount so refinanced or refunded;
(E) Secured Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to refinance or refund, replace, exchange, renew, repay, redeem, defease, discharge or extend (collectively, “incurrefinance,” “refinances,” “refinancing” and collectively“refinanced” shall have a correlative meaning) (“Permitted Refinancing Secured Indebtedness”), an “incurrence”) with respect to any then outstanding Secured Indebtedness (including Acquired Indebtedness) and Holdings will not issue or Indebtedness repaid substantially concurrently with, but in any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock orcase before, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Permitted Refinancing Secured Indebtedness) incurred under Sections 3.12(A), 3.12(B), 3.12(C), 3.12(F), 3.12(G), 3.12(H), 3.12(I) and 3.12(J) and any refinancing thereof in an amount not to exceed the amount so refinanced or refunded (plus reasonable premiums, accrued interest, fees and expenses); provided that (i) Secured Indebtedness the proceeds of which are used to refinance or refund the Notes or Secured Indebtedness that is pari passu with, or subordinated in right of payment to, the Notes shall only be permitted under this Section 3.12(E) if (y) in case the Notes are refinanced in part or the Secured Indebtedness to be refinanced is pari passu with the Notes, such new Secured Indebtedness, by its terms or by the terms of any agreement or instrument pursuant to which such new Secured Indebtedness is outstanding, is expressly made pari passu with, or subordinate in right of payment to, the remaining Notes, if any, as applicable, or (z) in case the Secured Indebtedness to be refinanced is subordinated in right of payment to the Notes, such new Secured Indebtedness, by its terms or by the terms of any agreement or instrument pursuant to which such new Secured Indebtedness is issued or remains outstanding, is expressly made subordinate in right of payment to the Notes at least to the extent and in the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00same manner that the Secured Indebtedness to be refinanced is subordinated to the Notes, (2ii) if such new Secured Indebtedness, Disqualified Stock or shares determined as of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio date of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such new Secured Indebtedness, does not mature prior to the Stated Maturity of the Secured Indebtedness to be refinanced, and the use Average Life of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect such new Secured Indebtedness is at least equal to the incurrence remaining Average Life of the Secured Indebtedness to be refinanced, (iii) such new Secured Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock will not have additional obligors or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries greater (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured)higher ranking priority) guarantees; and provided, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereoffurther, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Liens securing such Secured Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 do not extend to or cover any property or assets of the Company or any Restricted Subsidiary other than the property or assets securing the Secured Indebtedness being refinanced, and (y) 50.0% do not rank higher in priority than the Liens on such property or assets securing the Secured Indebtedness being refinanced, whether by priority of Consolidated EBITDA for such Lien or the most recently ended Test Period (calculated priority of payment on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documentsenforcement of such Lien;
(bF) Secured Indebtedness represented by of the Unsecured Asset Sale Bridge (including Company or any guarantee thereof) in the aggregate amount Company Indenture Party not to exceed €500,000,000US$50,000,000; provided that such Secured Indebtedness shall not constitute refinancing Indebtedness;
(cG) Secured Indebtedness incurred (i) Indebtedness (including any unused commitment) outstanding on in connection with the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchaseacquisition, lease, construction, installation, maintenancerepair, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets assets) or (ii) in respect of Sale/Leaseback Transactions of equipment and Indebtedness arising from the conversion property of the obligations of Holdings Company or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with in the principal amount case of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (di) and all Refinancing (ii), at any time outstanding (together with refinancing thereof) not to exceed an amount equal to 25.0% of PP&E; provided, that the Liens securing such Indebtedness shall not be permitted to exist on any portion of the Collateral and such Lien secures only the assets that are the subject of the Indebtedness referred to in this Section 3.12(G);
(H) Secured Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed by the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings Company or any Restricted Subsidiary with a maturity of one year or less for working capital in an aggregate principal amount at any one time outstanding (together with any refinancings thereof, including any Permitted Refinancing Indebtedness under Section 3.12(E) (which must for such purposes have a maturity of one year or less and be for working capital)) of all Secured Indebtedness incurred under this Section 3.12(H), together with the aggregate principal amount at such time outstanding of any Indebtedness incurred (i) pursuant to this clause the SCB Agreement and (dii) in connection with a Permitted Sale Leaseback shall pursuant to any Receivable Financing (other than Non-recourse Receivable Financing) under Section 3.12(I), not be subject to exceed 15.0% of Total Revenue (or the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(aDollar Equivalent thereof);
(eI) Secured Indebtedness incurred by Holdings arising in connection with Hedging Agreements entered into in the ordinary course of business (and not for speculative purposes) (a) to hedge or mitigate risks to which the Company or any Restricted Subsidiary of its Subsidiaries has actual or potential exposure (other than those in respect of equity interest of the Company or any of its Subsidiaries), including letter of credit obligations consistent with past practice constituting reimbursement obligations to hedge or mitigate foreign currency and commodity price risks and (b) to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to letters any interest-bearing liability of credit issued the Company or any of its Subsidiaries; provided that the Liens secured such Secured Indebtedness are encumbering customary initial deposits or margin deposits or are otherwise within the general parameters customary in the industry and incurred in the ordinary course of business), ;
(J) Secured Indebtedness of the Company or any Restricted Subsidiary in respect of workers’ compensation claimsReceivable Financing (other than Non-recourse Receivable Financing) in an aggregate principal amount any time outstanding (together with any refinancing thereof, deferred compensationincluding any Permitted Refinancing Indebtedness under Section 3.12(E)) not to exceed $15,000,000; provided that the Liens securing such Secured Indebtedness are on accounts receivables and other assets of the type specified in the definition of “Receivable Financing;”
(K) Secured Indebtedness incurred to finance Capital Expenditures duly approved by the Board of Directors; provided, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other that the Liens securing such Indebtedness shall not be permitted to exist on any portion of the Collateral and such Lien secures only the assets that are the subject of the Indebtedness referred to in this Section 3.12(K);
(L) Secured Indebtedness with respect to reimbursement letters of credit, bank guarantee, or indemnification type similar instruments posted to support (i) pension obligations regarding workers’ compensation claimsthat arise in the ordinary course of business; and (ii) contracts with trade creditors, deferred compensationcontracts (other than in respect of debt for borrowed money), leases, bids, statutory obligations, customs, surety, stay, appeal and performance bonds, performance or surety bonds, and completion guarantees and other obligations of a like nature (including those to secure health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar safety and environmental obligations), in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past industry practice;
(M) Secured Indebtedness owed to (i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed Person providing worker’s compensation to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings Company or any of its Subsidiaries) as determined Subsidiaries incurred in accordance connection with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied Person providing such benefits pursuant to customary reimbursement or indemnification obligations to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) Person and (ii) Indebtedness, Disqualified Stock appeal or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, mergersimilar bonds, or consolidation or bonds with respect to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiaryworker’s compensation claims; provided that the amount of Liens securing such Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may shall be incurred pursuant to in the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph ordinary course of this Section 10.1 or (ii) clause (c) business and exclusive of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA obligations for the most recently ended Test Period payment of borrowed money;
(calculated N) any Junior Lien Indebtedness; and
(O) on a Pro Forma Basis) at and from the time of incurrence at Forward Purchase Closing, any one time outstanding, other Secured Indebtedness that the Company or (y) Persons that are acquired by Holdings or any its Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) Holdings would be permitted to incur at least $1.00 of additional Indebtedness pursuant to any of the Fixed Charge Coverage Ratio test set forth in the first paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Priority Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theDocuments.
Appears in 1 contract
Limitation on Indebtedness. Holdings The Parent Borrower will not, and will not permit any of the Restricted Subsidiary to Subsidiaries to, create, incur, issue, assume, guarantee assume or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect suffer to exist any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) (w) Indebtedness arising under the Credit Documents (including any Indebtedness incurred pursuant to Section 2.14), (x) Indebtedness arising under any Permitted Receivables Financing in an aggregate principal amount not to exceed, together with Indebtedness arising under the Credit Documents, $4,500,000,000, (y) Indebtedness arising under the CF Facilities in an aggregate principal amount not to exceed at any time outstanding the sum of $4,000,000,000 and the portion of the Free and Clear Amount that the Parent Borrower has elected to apply to increase capacity under this clause (a)(y) to the extent such commitments and/or loans are not otherwise reduced or terminated and any modification, replacement, refinancing, refunding, renewal, defeasance or extension of any Indebtedness arising under the CF Facilities and any Indebtedness incurred to so modify, replace, refinance, refund, renew, defease or extend such Indebtedness and, except to the extent otherwise expressly permitted hereunder, the principal amount of any such modification, replacement, refinancing, refunding, renewal, defeasance or extension does not exceed the principal amount thereof outstanding immediately prior to such modification, replacement, refinancing, refunding, renewal or extension except by an amount equal to the unpaid accrued interest and premium thereon plus other reasonable amounts paid and fees and expenses incurred in connection with such modification, replacement, refinancing, refunding, renewal or extension; provided that the Parent Borrower, on behalf of the Borrowers, shall give the Administrative Agent prompt written notice of any increase in the aggregate amount committed in respect of the CF Facilities, and (z) intercompany Indebtedness of Restricted Subsidiaries, and any Guarantee Obligations in respect thereof, to allocate the Parent Borrower’s cost of borrowing to such Subsidiaries with respect to Indebtedness referred to in subclauses (w), (x) and (y) or in respect of Indebtedness incurred following the Third Restatement Effective Date by the Parent Borrower;
(b) Subject to compliance with Section 10.5, Indebtedness represented by of the Unsecured Asset Sale Bridge (including Parent Borrower or any guarantee thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 Restricted Subsidiary owed to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings Parent Borrower or any Restricted Subsidiary; provided that, in each case, all such Indebtedness of any Credit Party owed to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment any Person that is used or useful not a Credit Party shall be subordinated in a Similar Business, whether through the direct purchase right of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject payment to the foregoing limitation so long as the proceeds Obligations of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Credit Party on customary terms;
(eA) Indebtedness incurred by Holdings or in respect of any Restricted Subsidiary (including bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities and discounted bills of exchange or the discounting or factoring of receivables for credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued management purposes, in each case entered into or undertaken in the ordinary course of business), business (including (i) in respect of workers’ workers compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims, (ii) any bank guarantees, letters of credit or similar facilities by any Governmental Authority or to satisfy any governmental or regulatory requirements, (iii) any tenders, statutory obligations, surety and appeal bonds, bids, leases, governmental contracts, performance and return-of-money bonds and other similar obligations incurred in the ordinary course of business or consistent with past practices and (iv) Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance) and (B) Indebtedness supported by a letter of credit issued pursuant to credit facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(fd) subject to compliance with Section 10.5, Guarantee Obligations incurred by (i) Restricted Subsidiaries in respect of Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary Parent Borrower or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided Subsidiaries that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing is not prohibited to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness incurred under this Agreement (except to another the extent of any express restriction on Guarantee Obligations relating to such Indebtedness provided for herein) and (ii) the Parent Borrower or another in respect of Indebtedness of Restricted SubsidiarySubsidiaries that is not prohibited to be incurred under this Agreement; provided that, except as provided in clauses (j) and (k) below, there shall be deemed, in each case to be an incurrence of such Indebtedness not permitted no guarantee by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer Subsidiary Borrower of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausea Credit Party;
(e) Guarantee Obligations (i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, incurred in the ordinary course of business in respect of obligations of (or consistent with past practiceto) suppliers, customers, franchisees, lessors and licensees or (ii) otherwise constituting Investments permitted by Sections 10.5(e), 10.5(g), 10.5(i), 10.5(q), or 10.5(y);
(f) (i) Indebtedness, Disqualified Stock Indebtedness (including Indebtedness arising under Capital Leases and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereofpurchase money indebtedness) up to 100% incurred within one year of the net cash proceeds received by Holdings since immediately after acquisition, purchase, construction, repair, replacement, expansion or improvement of fixed or capital assets to finance the Closing Date from acquisition, purchase, construction, repair, replacement, expansion or improvement of such fixed or capital assets (whether through the issue direct purchase of assets or sale the Stock of Equity Interests of Holdings or cash contributed to the capital of Holdings any Person owning such assets), (ii) Indebtedness arising under Capital Leases entered into in each caseconnection with Permitted Sale Leasebacks and (iii) Indebtedness arising under Capital Leases, other than Excluded Contributions(x) Capital Leases in effect on or prior to March 31, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries2021 and (y) as determined Capital Leases entered into after March 31, 2021 and in accordance with Sections 10.5(a)(iii)(B) effect on the Third Restatement Effective Date and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied set forth on Schedule 10.1 and Capital Leases entered into pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments subclauses (other than Permitted Investments specified in clauses (a) and (c) of the definition thereofi) and (ii) Indebtedness, Disqualified Stock or preferred stock above; provided that the aggregate amount of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and Indebtedness incurred pursuant to this clause subclause (l)(ii), does not iii) at any one time outstanding shall not exceed the greater of (x) $825,000,000 500,000,000 and (y) 75.05% of Consolidated EBITDA for the most recently ended recent Test Period for which Section 9.1 Financials have been delivered, and (calculated on a Pro Forma Basisiv) at any modification, replacement, refinancing, refunding, renewal or extension of any Indebtedness specified in subclause (i), (ii) or (iii) above and any Indebtedness incurred to so modify, replace, refinance, refund, renew, defease or extend such Indebtedness; provided that, except to the time extent otherwise expressly permitted hereunder, the principal amount of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock Indebtedness incurred pursuant to this subclause (iv) does not exceed the principal amount thereof outstanding immediately prior to such modification, replacement, refinancing, refunding, renewal or extension (and with respect to a modification, replacement, refinancing, refunding, renewal, defeasance or extension of Indebtedness under clause (l)(iiiii), the amount specified therein) shall cease except by an amount equal to be deemed the unpaid accrued interest and premium thereon plus other reasonable amounts paid and fees and expenses incurred in connection with such modification, replacement, refinancing, refunding, renewal or outstanding for purposes extension;
(i) other than Indebtedness described in subclause (ii) of this clause (l)(iig), Indebtedness (including any unused commitment) (x) outstanding on or prior to March 31, 2021 and (y) incurred after March 31, 2021 and outstanding on the Third Restatement Effective Date and set forth on Schedule 10.1, (ii) Indebtedness existing on the Third Restatement Effective Date and owed by the Parent Borrower or any Restricted Subsidiary to the Parent Borrower or any Restricted Subsidiary, and any Guarantee Obligations in respect thereof, but shall be deemed incurred only for so long as such Indebtedness or any refinancing, refunding or renewal thereof permitted by this subclause (ii) is held by the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or Parent Borrower, such Restricted Subsidiary could have or a Credit Party and, in the case of each of the preceding subclauses (i) and (ii), any modification, replacement, refinancing, refunding, renewal, defeasance or extension thereof (including any unused commitment) and any Indebtedness incurred to so modify, replace, refinance, refund, renew, defease or extend such Indebtedness (or, in the case of subclause (ii) only, any intercompany transfer of creditor positions in respect thereof pursuant to intercompany debt restructurings); provided that all such Indebtedness arising as a result of any such transfer of creditor positions as contemplated by subclause (ii) of any Credit Party owed to any Person that is not a Credit Party shall be subordinated to the Obligations of such Credit Party on customary terms; provided further that except to the extent otherwise expressly permitted hereunder, in the case of any such modification, replacement, refinancing, refunding, renewal, defeasance or extension (but not any such transfer of creditor positions), (x) the original aggregate principal amount thereof does not exceed the aggregate principal amount thereof outstanding immediately prior to such modification, replacement, refinancing, refunding, renewal, defeasance or extension except by an amount equal to any accrued interest and premium thereon plus other reasonable amounts paid and fees and expenses incurred in connection with such modification, replacement, refinancing, refunding, renewal. defeasance or extension, or paid in respect of such Indebtedness, Disqualified Stock (y) the direct and contingent obligors with respect to such Indebtedness are not changed (except that any Credit Party may also be made an obligor thereunder), and (z) except in the case of a refinancing of Indebtedness pursuant to subclause (ii), or preferred stock under any customary bridge facility so long as the first paragraph long-term debt into which such customary bridge facility is to be converted satisfies the provisions of this Section 10.1 without reliance on this clause (l)(iiz), either (I) such Indebtedness has the same or later final maturity than the Indebtedness being refinanced (except to the extent of nominal amortization) or (II) no portion of such refinancing Indebtedness matures prior to the Final Maturity Date (determined as of the date such Indebtedness is incurred);
(mh) the incurrence or issuance by Holdings or any Restricted Subsidiary Indebtedness in respect of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances Hedge Agreements;
(i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence Credit Parties in an aggregate principal amount at any one time outstandingoutstanding not to exceed $2,000,000,000;
(1) Indebtedness of a Person or Indebtedness attaching to assets of a Person that, in either case, becomes a Restricted Subsidiary (or (yis a Restricted Subsidiary that survives a merger with such Person) Persons or Indebtedness attaching to assets that are acquired by Holdings the Parent Borrower or any Restricted Subsidiary Subsidiary, in each case after the Closing Date as the result of a Permitted Acquisition or merged into or consolidated with Holdings or Investment not prohibited hereby; provided that (w) such Indebtedness existed at the time such Person became a Restricted Subsidiary or at the time such assets were acquired and, in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisitioneach case, merger, consolidation or designation described was not created in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theanticipation thereof;
Appears in 1 contract
Limitation on Indebtedness. Holdings The Borrower will not, and will not permit any of its Restricted Subsidiary Subsidiaries to create, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and Holdings the Borrower will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers Borrower and their its Restricted Subsidiaries may incur unsecured Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that that, only if the outstanding amount Payment Conditions are not satisfied, the final maturity of any such unsecured Indebtedness (including Acquired Indebtedness) shall not occur, and no such unsecured Indebtedness (including Acquired Indebtedness) shall require mandatory commitment reductions (other than Acquired Indebtedness)customary amortization payments) prior to, Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstandingLatest Maturity Date. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documents;
(bi) Indebtedness represented by the Unsecured Asset Sale Bridge Term Loan Facility and any guarantee thereof in an aggregate principal amount (including together with any Refinancing Indebtedness in respect thereof and all accrued interest, fees and expenses) not to exceed the sum of (A) $1,825,000,000 and (B) the Maximum Incremental Facilities Amount (as defined in the Term Loan Credit Agreement) as of the date of such incurrence and (ii) Indebtedness represented by the Existing ▇▇▇▇▇ Notes and Existing Senior Notes and any guarantee thereof) in the aggregate amount not to exceed €500,000,000; provided that such Existing ▇▇▇▇▇ Notes and Existing Senior Notes have been defeased;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Restatement Effective Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Restatement Effective Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings the Borrower or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings the Borrower or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings the Borrower or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 150,000,000 and (y) 50.035% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings the Borrower or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings the Borrower or such Restricted Subsidiary in accordance with Section 5.2(ato permanently repay outstanding Term Loans or other Indebtedness secured by a Lien on the assets subject to such Permitted Sale Leaseback (excluding any Lien ranking junior to the Lien securing the Obligations);
(e) Indebtedness incurred by Holdings the Borrower or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings the Borrower or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings the Borrower to a Restricted Subsidiary; provided that any such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor is subordinated in right of payment to the Obligations; 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 another the Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted SubsidiarySubsidiary or the Borrower; provided that if the Borrowers or a Subsidiary Guarantor incur incurs such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Subsidiary Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Subsidiary Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings the Borrower or another Restricted SubsidiarySubsidiary Guarantor) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings the Borrower or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings the Borrower or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(ki) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings the Borrower or any Restricted Subsidiary or (ii) obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings the Borrower or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings the Borrower since immediately after the Closing Restatement Effective Date from the issue or sale of Equity Interests of Holdings the Borrower or cash contributed to the capital of Holdings the Borrower (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its the Borrower’s Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings the Borrower or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 205,000,000 and (y) 75.050% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings the Borrower or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings the Borrower or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, and this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, provided 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings the Borrower that is not the Borrowers or a Subsidiary Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers Borrower or a Subsidiary Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings the Borrower or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiaryconsolidation; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred under the first paragraph of this Section 10.1 by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (Ai) $550,000,000 165,000,000 and B(ii) 50.040% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings the Borrower or any Restricted Subsidiary or merged into or consolidated with Holdings the Borrower or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, either (1) Holdings would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth (as defined in the first paragraph Term Loan Credit Agreement) of this Section 10.1 the Borrower and the Restricted Subsidiaries (calculated on a pro forma basis) would be at least 2.00 to 1.00 or (2) the Fixed Charge Coverage Ratio (as defined in the Term Loan Credit Agreement) of Holdings the Borrower and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, designation or (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Total Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Total Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B2) less than or equal to 5.00:1.006.25:1.00; provided further that any such Indebtedness incurred under this clause (n) (x) shall not take the form of a separate asset based lending facility and (y) shall not be secured by a first priority lien on the ABL Priority Collateral;
(o) 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;
(i) Indebtedness of the Borrower or any Restricted Subsidiary supported by a letter of credit, in a principal amount not in excess of the stated amount of such letter of credit so long as such letter of credit is otherwise permitted to be incurred pursuant to this Section 10.1 or (ii) obligations in respect of letters of support, guarantees or similar obligations issued, made or incurred for the benefit of any Subsidiary of the Borrower to the extent required by law or in connection with any statutory filing or the delivery of audit opinions performed in jurisdictions other than within the United States;
(1) any guarantee by the Borrower or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as in the case of a guarantee of Indebtedness by a Restricted Subsidiary that is not a Guarantor, such Indebtedness could have been incurred directly by the Restricted Subsidiary providing such guarantee, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured any guarantee by a Lien on Restricted Subsidiary of Indebtedness of the Collateral on Borrower or (3) any co-issuance by Academy Finance Corporation of Indebtedness of the Borrower;
(r) Indebtedness of Restricted Subsidiaries that are not Guarantors; provided that the principal amount of such Indebtedness of which the primary obligor or a junior priority basis with guarantor is a Restricted Subsidiary that is not a Guarantor shall not exceed, in the Liens on the Collateral securing the Obligationsaggregate at any one time outstanding, the Consolidated Senior Secured Debt to greater of (x) $105,000,00 and (y) 25.5% of Consolidated EBITDA Ratio for the most recently ended Test Period (calculated on a Pro Forma Basis) (it being understood that any Indebtedness incurred pursuant to this clause (r) shall cease to be deemed incurred or outstanding for purposes of this clause (r) but shall be either deemed incurred for the purposes of the first paragraph of this covenant from and after the first date on which such Restricted Subsidiary could have incurred such Indebtedness under the first paragraph of this covenant without reliance on this clause (Ar));
(s) less than Indebtedness of the Borrower or equal to any of the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation Restricted Subsidiaries consisting of (i) the financing of insurance premiums or (Bii) less than take or equal pay obligations contained in supply arrangements in each case, incurred in the ordinary course of business or consistent with past practice;
(i) Indebtedness of the Borrower or any of the Restricted Subsidiaries undertaken in connection with cash management and related activities with respect to 5.50:1.00 any Subsidiary or joint venture in the ordinary course of business, including with respect to financial accommodations of the type described in the definition of Cash Management Services and (3ii) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theInde
Appears in 1 contract
Sources: Abl Credit Agreement (Academy Sports & Outdoors, Inc.)
Limitation on Indebtedness. Holdings The Borrower will not, and will not permit any of its Restricted Subsidiary Subsidiaries to create, incur, issue, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) and Holdings the Borrower will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers Borrower and their its Restricted Subsidiaries may incur unsecured Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that that, only if the outstanding amount Payment Conditions are not satisfied, the final maturity of any such unsecured Indebtedness (including Acquired Indebtedness) shall not occur, and no such unsecured Indebtedness (including Acquired Indebtedness) shall require mandatory commitment reductions (other than Acquired Indebtedness)customary amortization payments) prior to, Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstandingLatest Maturity Date. The foregoing limitations will not apply to:
(a) Indebtedness arising under the Credit Documents;; (b)
(bi) Indebtedness represented by the Unsecured Asset Sale Bridge (including Term Loan Facility and any guarantee thereofthereof in an aggregate principal amount (together with any Refinancing Indebtedness in respect thereof and all accrued interest, fees and expenses) in the aggregate amount not to exceed €500,000,000;the sum of (A) $400,000,000 and (B) the Maximum Incremental -122-
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing RestatementAmendment No. 4 Effective Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing RestatementAmendment No. 4 Effective Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
; (d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings the Borrower or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings the Borrower or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings the Borrower or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 150,000,000295,000,000 and (y) 50.035% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence; provided that Capitalized Lease Obligations incurred by Holdings the Borrower or any Restricted Subsidiary pursuant to this clause (d) in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings the Borrower or such Restricted Subsidiary in accordance with Section 5.2(a);
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance permanently repay outstanding Term Loans or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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;
(g) Indebtedness of Holdings to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(h) Indebtedness of a Restricted Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if the Borrowers or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appeal, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(ii) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes of the first paragraph of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii));
(m) the incurrence or issuance by Holdings or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstanding, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with assets subject to such Permitted Sale Leaseback (excluding any Lien ranking junior to the Liens on the Collateral Lien securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio ); (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, the
Appears in 1 contract
Sources: Abl Credit Agreement (Academy Sports & Outdoors, Inc.)
Limitation on Indebtedness. Holdings The Company will not, and will not permit any the Restricted Subsidiary to Subsidiaries to, create, incur, issueassume or suffer to exist any Indebtedness. Notwithstanding the foregoing, assume, guarantee or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect the limitations set forth in the immediately preceding sentence shall not apply to any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply tofollowing :
(a) (A) Indebtedness arising under any Credit Facility and any Refinancing Indebtedness thereof, in an aggregate principal amount not to exceed the sum of (i) $2,010,000,000, plus (ii) the principal amount of “Incremental Facilities” (as defined in the Existing Credit Agreement) measured at the time of incurrence pursuant to the Existing Credit Agreement, plus (iii) solely in the case of any such Refinancing Indebtedness, the Refinancing Increased Amount with respect thereto and (B) Indebtedness under the Credit DocumentsSecured Notes and any Refinancing Indebtedness thereof;
(b) Indebtedness represented by under the Unsecured Asset Sale Bridge (including ABL Credit Documents and any guarantee Refinancing Indebtedness thereof) in the aggregate amount not to exceed €500,000,000;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party);
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount whichnot to exceed the sum of (i) $300,000,000, when aggregated with plus (ii) the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause “Incremental Facilities” (das defined in the Existing ABL Credit Agreement) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) measured at the time of incurrence; provided that Capitalized Lease Obligations incurrence pursuant to the ABL Credit Agreement, plus (iii) solely in the case of any such Refinancing Indebtedness, the Refinancing Increased Amount with respect thereto;
(c) Indebtedness represented by (i) the Notes (other than any Additional Notes), including the Guarantees (other than in respect of any Additional Notes), (ii) any Indebtedness (other than Indebtedness incurred by Holdings pursuant to clauses (i) and (ii) of this paragraph) outstanding on the Issue Date and any Guarantees thereof, (c) Refinancing Indebtedness (including with respect to the Notes and any Guarantees thereof) incurred in respect of any Indebtedness described in this clause (c) of this paragraph;
(d) subject to compliance with Section 5.05, Indebtedness of the Company or any Restricted Subsidiary pursuant owed to this clause the Company or any Restricted Subsidiary; provided that all such Indebtedness of any Credit Party owed to any Person that is not a Credit Party shall be (dx) evidenced by the Intercompany Subordinated Note (provided that any Person becoming a Restricted Subsidiary after the Issue Date may enter into the Intercompany Subordinated Note within the time period set forth in connection with a Permitted Sale Leaseback shall not Section 4.05) or (y) otherwise be subject to subordination terms substantially identical to the foregoing limitation so long as subordination terms set forth in the proceeds of Intercompany Subordinated Note or otherwise reasonably acceptable to the Company (provided to the extent that there is an administrative agent under the Credit Agreement, the Company cannot make a determination different than that made by such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(aadministrative agent);
(e) Indebtedness subject to compliance with Section 5.05, Guarantee Obligations incurred by Holdings (i) Restricted Subsidiaries in respect of Indebtedness of the Company or any other Restricted Subsidiary that is permitted to be incurred under this Indenture and (including ii) the Company in respect of Indebtedness of Restricted Subsidiaries that is permitted to be incurred under this Indenture; provided that (x) if the Indebtedness being guaranteed under this Section 5.01(e) is subordinated to the Notes Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Notes Obligations on terms (taken as a whole) at least as favorable to the Holders as those contained in the subordination of such Indebtedness and (y) a Restricted Subsidiary that is not a Credit Party may not, by virtue of this Section 5.01(e), guarantee Indebtedness that such Restricted Subsidiary could not otherwise incur under this Section 5.01;
(f) Indebtedness in respect of any bankers’ acceptance, bank guarantees, letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued credit, warehouse receipt or similar facilities entered into in the ordinary course of business), business (including in respect of workers’ workers compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification reimbursement-type obligations regarding workers’ workers compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance;
(f) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnout or claims and similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, 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);
(g) Indebtedness Guarantee Obligations (i) incurred in the ordinary course of Holdings business in respect of obligations of (or to) suppliers, customers, franchisees, lessors and licensees, (ii) otherwise constituting Investments permitted by Section 5.05 (other than Investments permitted by Section 5.05(l) by reference to a Restricted SubsidiarySection 5.01 and Section 5.05(q)); 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 this clause (except to another Borrower or another Restricted Subsidiaryii) shall not be deemedconstrued to limit the requirements of Section 5.01(d) and (e), in each case to be an incurrence of such Indebtedness not permitted or (iii) contemplated by this clausethe Plan;
(h) Indebtedness (including Indebtedness arising under Capital Leases) incurred to finance the purchase price, cost of a Restricted Subsidiary owing to Holdings design, acquisition, construction, repair, restoration, replacement, expansion, installation or another Restricted Subsidiary; provided that if the Borrowers improvement of fixed or a Guarantor incur such Indebtedness owing to a Restricted Subsidiary that is not the Borrowers capital assets or a Guarantorotherwise in respect of Capital Expenditures, so long as such Indebtedness is subordinated in right incurred concurrently with or within 270 days of payment to the Guarantee acquisition, construction, repair, restoration, replacement, expansion, installation or improvement of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings fixed or another Restricted Subsidiary) shall be deemed, in each case to be an capital assets or incurrence of such Indebtedness not permitted by this clause;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clause;
(j) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(k) obligations in respect of self-insurance, performance, bid, appealExpenditure, and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of creditRefinancing Indebtedness thereof, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference not to exceed (together with any Refinancing Indebtedness in respect thereofi) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 160,000,000 and (y) 75.020% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence or issuance, plus the principal amount of Capital Leases outstanding on the Issue Date, in each case at any time outstanding, plus (it being understood that ii) solely in the case of any such Refinancing Indebtedness, Disqualified Stock or preferred stock incurred pursuant the Refinancing Increased Amount with respect thereto;
(i) Indebtedness permitted to this clause (l)(ii) shall cease remain outstanding under the Plan, and to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for the purposes extent such Indebtedness exceeds $5,000,000, set forth on Schedule 10.1 of the first paragraph Existing Credit Agreement and any Refinancing Indebtedness thereof; provided that in the case of this Section 10.1 from and after the first date on which Holdings or such Restricted Subsidiary could have incurred any Refinancing Indebtedness of any such Indebtedness, Disqualified Stock or preferred stock under each obligor of such Refinancing Indebtedness is an obligor of such Indebtedness;
(j) Indebtedness in respect of Hedging Agreements; provided that such Hedging Agreements are not entered into for speculative purposes (as determined by the first paragraph of this Section 10.1 without reliance on this clause (l)(ii)Company in good faith);
(mi) Permitted Other Debt assumed or incurred for any purpose, including to finance any Permitted Investments or Capital Expenditures; provided that (A) if such Indebtedness is incurred or assumed by a Restricted Subsidiary that is not a Credit Party, such Indebtedness is not guaranteed in any respect by the incurrence or issuance by Holdings Company or any Restricted Subsidiary of Indebtedness, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred other Guarantor except as permitted under Section 5.05, (B) the first paragraph aggregate principal amount of Indebtedness incurred or assumed under this Section 10.1 and clauses (b5.01(k)(i) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, that such Refinancing Indebtedness shall not exceed (1) has a weighted average life to maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining weighted average life to maturity of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a Guarantor;
(n) Indebtedness, Disqualified Stock or preferred stock greater of (x) Holdings or a Restricted Subsidiary incurred or issued to finance an acquisition, merger, or consolidation or to facilitate the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness $160,000,000 and (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (iy) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.020% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence at any one time outstandingor issuance, or plus (y2) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or additional amounts if, on a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that Pro Forma Basis after giving effect to any the incurrence or assumption of such acquisitionIndebtedness and the application of proceeds thereof and, mergerif applicable, consolidation the Permitted Investment or designation described Capital Expenditure, the Consolidated Total Net Leverage Ratio is not greater than 3.30 to 1.00 or, to the extent incurred or assumed in this clause connection with a Permitted Investment, the Consolidated Total Net Leverage Ratio (n), either: (i) if on a Pro Forma Basis for such transaction and the incurrence or assumption of such Indebtedness, Disqualified Stock or shares of preferred stock ) is not greater than (xI) unsecured 3.30 to 1.00 or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2II) the Fixed Charge Coverage Consolidated Total Net Leverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, Permitted Investment and (C) [reserved] and (ii) either any Refinancing Indebtedness in respect of the Indebtedness under clause (1i) if such Indebtednessabove; provided that Indebtedness incurred or assumed by Restricted Subsidiaries that are not Subsidiary Guarantors under this Section 5.01(k), Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis when combined with the Liens on total amount of Indebtedness incurred by Restricted Subsidiaries that are not Subsidiary Guarantors pursuant to Section 5.01(ee), shall not exceed the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to greater of (x) $160,000,000 and (y) 20% of Consolidated EBITDA Ratio for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence or issuance, in each case at any time outstanding;
(l) Indebtedness in respect of performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations not in connection with money borrowed, in each case, provided in the ordinary course of business or consistent with past practice, including those incurred to secure health, safety and environmental obligations in the ordinary course of business (including in respect of construction or restoration activities) or consistent with past practice;
(m) additional Indebtedness; provided that (i) the aggregate amount of Indebtedness incurred or issued pursuant to this Section 5.01(m) shall be either not exceed the greater of (Ax) less than or equal to the Consolidated First Lien Secured Debt to $160,000,000 and (y) 20% of Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on for the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence or issuance, in each case at any time outstanding and (ii) such Indebtedness shall not be either pari passu with the Notes in security (Awithout regard to control of remedies);
(n) less than Cash Management Obligations and other Indebtedness in respect of overdraft facilities, employee credit card programs, netting services, automatic clearinghouse arrangements and other cash management and similar arrangements in the ordinary course of business;
(i) Indebtedness incurred in the ordinary course of business in respect of obligations of the Company or equal any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (ii) Indebtedness in respect of intercompany obligations of the Company or any Restricted Subsidiary with the Company or any Restricted Subsidiary in respect of accounts payable incurred in connection with goods sold or services rendered in the ordinary course of business and not in connection with the borrowing of money;
(p) Indebtedness arising from agreements of the Company or any Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations (including earn-outs), in each case entered into in connection with Permitted Investments and the Disposition of any business, assets or Stock or Stock Equivalents permitted hereunder;
(q) Indebtedness of the Company or any Restricted Subsidiary consisting of (i) financing of insurance premiums or (ii) take or pay obligations contained in supply agreements, in each case arising in the ordinary course of business;
(r) Indebtedness representing deferred compensation, or similar arrangement, to employees, consultants or independent contractors of the Company and the Restricted Subsidiaries incurred in the ordinary course of business;
(s) Indebtedness consisting of promissory notes issued by the Company or any Restricted Subsidiary to present or former officer, manager, consultant, director or employee (or their respective wealth management vehicles, spouses, former spouses, successors, executors, administrators, heirs, legatees, distributees, estates or immediate family members) to finance the purchase or redemption of Stock or Stock Equivalents of the Company (or any direct or indirect parent thereof) permitted by Section 5.06(b);
(t) Indebtedness consisting of obligations of the Company and the Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transactions and any Permitted Investment;
(u) Indebtedness in respect of (i) Permitted Receivables Financings owed by a Receivables Entity or Qualified Securitization Financings owed by a Securitization Subsidiary and (ii) accounts receivable factoring facilities in the ordinary course of business; provided that the aggregate amount of Receivables Indebtedness pursuant to this clause (u) shall not exceed $160,000,000 at any time outstanding;
(v) Indebtedness in respect of (i) Permitted Other Debt issued or incurred to the Consolidated Secured extent that the Net Cash Proceeds therefrom are applied to the prepayment of the Term Loans in the manner set forth in Section 5.2(a)(iii)(A) of the Existing Credit Agreement; (ii) other Permitted Other Debt in an aggregate principal amount not to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or exceed the then-available Maximum Incremental Facilities Amount (B) less than or equal to 5.50:1.00 or (3) as defined in the Existing Credit Agreement); provided that if such IndebtednessPermitted Other Debt incurred pursuant to this clause (ii) is unsecured or secured on a junior basis to the Notes Obligations, Disqualified Stock or shares such Permitted Other Debt shall not have a maturity date earlier than 91 days after the maturity date of preferred stock is the Notes; and (iii) any Refinancing Indebtedness in respect of Indebtedness incurred pursuant to clauses (i) and (ii) above;
(i) Indebtedness in respect of Permitted Debt Exchange Instruments (as defined in the Existing Credit Agreement) incurred pursuant to a Permitted Debt Exchange (as defined in the Existing Credit Agreement) in accordance with Section 2.17 of the Existing Credit Agreement and (ii) any Refinancing Indebtedness thereof;
(x) unsecured or Indebtedness in an amount not to exceed the Available Equity Amount;
(y) [reserved];
(z) intercompany Indebtedness among the Company and its Subsidiaries constituting any part of any Permitted Reorganization;
(aa) to the extent constituting Indebtedness, customer deposits and advance payments (including progress payments) received in the ordinary course of business from customers for goods and services purchased in the ordinary course of business;
(i) Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit, in a principal amount not in excess of the stated amount of such letter of credit so long as such letter of credit is secured otherwise permitted to be incurred pursuant to this Section 5.01 or (ii) obligations in respect of letters of support, guarantees or similar obligations issued, made or incurred for the benefit of the Company or any Subsidiary of the Company in connection with any statutory filing or the delivery of audit opinions performed in jurisdictions other than the United States;
(cc) Indebtedness owing to the seller of any business or assets permitted to be acquired by assets the Company or any Restricted Subsidiary under this Indenture; provided that do the aggregate amount of Indebtedness permitted under this clause (cc) shall not become Collateralexceed the greater of $160,000,000 and 20% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) outstanding at any time;
(dd) obligations in respect of Disqualified Stock in an amount not to exceed the greater of $25,000,000 and 3% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) outstanding at any time;
(ee) Indebtedness incurred by Restricted Subsidiaries that are not Subsidiary Guarantors under this clause (ee), thewhen combined with the total amount of Indebtedness incurred by Restricted Subsidiaries that are not Subsidiary Guarantors pursuant to Section 5.01(k), shall not exceed the greater of (x) $160,000,000 and (y) 20% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of incurrence or issuance, in each case at any time outstanding; and
(ff) all premiums (if any), interest (including post-petition interest), fees, expenses, charges, and additional or contingent interest on obligations described in clauses (a) through (ee) above. For the avoidance of doubt, any Indebtedness permitted to be incurred under any clause of this Section 5.01 may be used to modify, refinance, refund, renew, replace, exchange or extend any outstanding Indebtedness, including any such Indebtedness incurred under any other clause of this Section 5.01 and any such Indebtedness with respect to which the incurrence of Refinancing Indebtedness is expressly permitted under this Section 5.01, in each case, subject to the restrictions set forth in Section 5.07. Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount and the payment of interest or dividends in the form of additional Indebtedness or Disqualified Stock will not be deemed to be an incurrence or issuance of Indebtedness or Disqualified Stock for purposes of this covenant. This Indenture will not treat (1) unsecured Inde
Appears in 1 contract
Sources: Indenture (Avaya Holdings Corp.)
Limitation on Indebtedness. Holdings will The Borrower shall not, and will shall not permit any Restricted Subsidiary to of its Subsidiaries to, create, incur, issue, assume, guarantee suffer to exist, or otherwise become liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) remain directly or indirectly liable with respect to to, any Indebtedness (including Acquired Indebtedness) and Holdings will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or, in the case of Restricted Subsidiaries that are not Guarantors, preferred stock; provided that Holdings, the Borrowers and their Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of preferred stock, (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations, the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a pari passu basis with the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, either (A) the Consolidated Secured Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is secured by a Lien on a junior basis to the Liens on the Collateral securing the Obligations), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 5.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00 and (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (i) unsecured or (ii) is secured by assets that do not become Collateral, either (A) the Consolidated Total Debt to Consolidated EBITDA Ratio of Holdings and the Restricted Subsidiaries (including for the purposes of such calculation any Disqualified Stock or shares of preferred stock that is unsecured), after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis would not exceed 6.50:1.00 or (B) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries, after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, on a Pro Forma Basis, would be at least 1.75:1.00; provided further that the outstanding amount of Indebtedness (other than Acquired Indebtedness), Disqualified Stock and preferred stock that may be incurred pursuant to the foregoing together with any amounts incurred under (i) Section 10.1(n)(x) or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors shall not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding. The foregoing limitations will not apply toexcept:
(a) Indebtedness arising under the Credit Documentsincurred pursuant to this Agreement;
(b) so long as no Default or Event of Default has occurred and is continuing at the time of the incurrence thereof or after giving effect thereto, Indebtedness represented by the Unsecured Asset Sale Bridge (including any guarantee thereof) consisting of Contingent Obligations in the aggregate amount not to exceed €500,000,000respect of obligations of other Persons;
(c) (i) Indebtedness (including any unused commitment) outstanding on the Closing Date listed identified on Schedule 10.1 to the Disclosure Letter and (ii) intercompany Indebtedness (including any unused commitment) outstanding on the Closing Date listed on Schedule 10.1 to the Disclosure Letter (other than intercompany Indebtedness owed by a Credit Party to another Credit Party)7.04;
(d) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock so long as no Default or Event of Default has occurred and preferred stock incurred by Holdings or any Restricted Subsidiary, to finance the purchase, lease, construction, installation, maintenance, replacement or improvement of property (real or personal) or equipment that is used or useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets and Indebtedness arising from the conversion of the obligations of Holdings or any Restricted Subsidiary under or pursuant to any “synthetic lease” transactions to on-balance sheet Indebtedness of Holdings or such Restricted Subsidiary, in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (d) and all Refinancing Indebtedness incurred to refinance any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (d), does not exceed the greater of (x) $550,000,000 and (y) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) continuing at the time of incurrence; provided that Capitalized Lease Obligations the incurrence thereof or after giving effect thereto, Indebtedness incurred by Holdings or any Restricted Subsidiary pursuant to this clause (d) in the ordinary course of business in connection with a Permitted Sale Leaseback shall not be subject to the foregoing limitation so long as the proceeds of such Permitted Sale Leaseback are used by Holdings or such Restricted Subsidiary in accordance with Section 5.2(a)Capital Leases and purchase money Indebtedness;
(e) Indebtedness incurred by Holdings or any Restricted Subsidiary (including letter of credit obligations consistent with past practice constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business), in respect of workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement or indemnification type obligations regarding workers’ compensation claims, deferred compensation, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insuranceunder Swap Contracts entered into for hedging purposes;
(f) Indebtedness arising of the Borrower and its Subsidiaries having a maturity of 92 days or less representing borrowings from agreements of Holdings a bank or banks with which the Borrower or such Subsidiary has a Restricted depository relationship, which borrowings shall be fully secured by Cash Equivalents purchased by the Borrower or such Subsidiary providing for indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or a Subsidiary or other Person, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion proceeds of such business, assets or a Subsidiary for the purpose of financing such acquisitionborrowings;
(g) Indebtedness obligations incurred in the ordinary course of Holdings business in connection with relocation service transactions and secured by properties which are the subject to a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Borrower or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausetransactions;
(h) Indebtedness incurred by the Borrower or a Subsidiary to fund a Permitted Acquisition and Indebtedness of a Restricted Person that becomes a Subsidiary owing to Holdings or another Restricted Subsidiary; provided that if after the Borrowers or a Guarantor incur such Indebtedness owing Closing Date pursuant to a Restricted Subsidiary that is Permitted Acquisition, which Indebtedness existed prior to such Acquisition and was not the Borrowers or a Guarantor, such Indebtedness is subordinated created in right of payment to the Guarantee of such Guarantor as the case may be; provided, further, that any subsequent transfer of any such Indebtedness (except to Holdings or another Restricted Subsidiary) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this clausecontemplation thereof;
(i) shares of preferred stock of a Restricted Subsidiary issued to Holdings or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to Holdings or another Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of preferred stock not permitted by this clauseIndebtedness under the Public Debentures;
(j) Hedging Obligations so long as no Default or Event of Default has occurred and is continuing at the time of incurrence thereof or after giving effect thereto, unsecured Indebtedness of the Borrower; provided that such Indebtedness (excluding Hedging Obligations entered into i) shall have a stated maturity of no earlier than the date that is 75 days after the Maturity Date, (ii) shall not have any scheduled principal payments or provide for speculative purposesany mandatory prepayments or redemptions or repurchases not otherwise provided to the Lenders hereunder prior to the date that is 75 days after the Maturity Date (other than (A) by way of acceleration after default or (B) in respect of, or upon, the conversion or mandatory prepayment of Convertible Indebtedness); and (iii) has covenants, defaults and other terms and conditions (other than interest rates and change of control or “fundamental change” provisions) no more restrictive (when taken as a whole) than those contained in this Agreement (it being understood that “mandatory prepayment” with respect to Convertible Indebtedness includes, and the “stated maturity” of Convertible Indebtedness does not include, the repurchase of Convertible Indebtedness by the Borrower at the option of the creditor of such Convertible Indebtedness (whether upon the occurrence of specified events or conditions, on specified dates or otherwise));
(k) obligations in respect so long as no Default or Event of self-insurance, performance, bid, appeal, Default has occurred and surety bonds and completion guarantees and similar obligations provided by Holdings or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice;
(i) Indebtedness, Disqualified Stock and preferred stock of Holdings or any Restricted Subsidiary in an aggregate principal amount or liquidation preference (together with any Refinancing Indebtedness in respect thereof) up to 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than Excluded Contributions, any Cure Amount or proceeds of Disqualified Stock or sales of Equity Interests to Holdings or any of its Subsidiaries) as determined in accordance with Sections 10.5(a)(iii)(B) and 10.5(a)(iii)(C) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 10.5(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (a) and (c) of the definition thereof) and (ii) Indebtedness, Disqualified Stock or preferred stock of Holdings or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and preferred stock then outstanding and incurred pursuant to this clause (l)(ii), does not at any one time outstanding exceed the greater of (x) $825,000,000 and (y) 75.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) is continuing at the time of incurrence thereof, other secured or unsecured Indebtedness of the Borrower and its Subsidiaries, provided the aggregate principal amount of such Indebtedness (it being understood that any Indebtedness, Disqualified Stock or preferred stock incurred pursuant to this clause (l)(iiexcluding Indebtedness of Strategic Investment Subsidiaries and their respective Subsidiaries permitted under Section 7.04(o)) shall cease to be deemed incurred or outstanding for purposes of this clause (l)(ii) but shall be deemed incurred for not exceed at the purposes time of the first paragraph incurrence of this Section 10.1 from and after any thereof 10% of Net Worth as of the first date on which Holdings or end of the fiscal quarter immediately preceding any such Restricted incurrence;
(l) obligations consisting of guarantees of any Subsidiary could have incurred of Indebtedness of insurance agents of an Insurance Subsidiary in an aggregate amount not to exceed at the time of the incurrence of any thereof 3% of Net Worth as of the end of the fiscal quarter immediately preceding such Indebtedness, Disqualified Stock or preferred stock under the first paragraph of this Section 10.1 without reliance on this clause (l)(ii))incurrence;
(m) Indebtedness of the incurrence or issuance by Holdings Borrower owing to any Subsidiary and of any Subsidiary owing to the Borrower or any Restricted Subsidiary other Subsidiary, provided that, in the case of IndebtednessIndebtedness of the Borrower owing to any Subsidiary, Disqualified Stock or preferred stock which serves to refinance any Indebtedness, Disqualified Stock or preferred stock incurred as permitted under the first paragraph payment of this Section 10.1 and clauses (b) and (c) above, clause (l)(i) and, this clause (m) and clause (n) below or any Indebtedness, Disqualified Stock or preferred stock issued to so refinance, replace, refund, extend, renew, defease, restructure, amend, restate or otherwise modify (collectively, “refinance”) such Indebtedness, Disqualified Stock or preferred stock including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (including reasonable tender premiums), defeasance costs and fees in connection therewith (the “Refinancing Indebtedness”) prior to or at its respective maturity; provided, 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 subordinate to the remaining weighted average life to maturity payment of the Indebtedness, Disqualified Stock or preferred stock being refinanced, (2) Obligations in a manner satisfactory to the extent such Refinancing Indebtedness refinances (i) Indebtedness that is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, such Refinancing Indebtedness is unsecured or secured by a Lien ranking junior to the Liens securing the Obligations, (ii) Disqualified Stock or preferred stock, such Refinancing Indebtedness must be Disqualified Stock or preferred stock, respectively, and (iii) Indebtedness subordinated to the Obligations, such Refinancing Indebtedness is subordinated to the Obligations at least to the same extent as the Indebtedness being Refinanced and (3) shall not include Indebtedness, Disqualified Stock or preferred stock of a Subsidiary of Holdings that is not the Borrowers or a Guarantor that refinances Indebtedness, Disqualified Stock or preferred stock of the Borrowers or a GuarantorAdministrative Agent;
(n) IndebtednessNon-Recourse Debt of the Designated Subsidiaries;
(o) Indebtedness of the Strategic Investment Subsidiaries and their respective Subsidiaries, Disqualified Stock which Indebtedness may be secured by assets of the Strategic Investment Subsidiaries or preferred stock any of (x) Holdings their respective Subsidiaries, provided in no event shall the owner of such Indebtedness have any recourse, directly or a Restricted Subsidiary incurred indirectly, to the Borrower or issued to finance an acquisition, merger, or consolidation or to facilitate the designation any of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that the amount of Indebtedness its Subsidiaries (other than Acquired Indebtedness)the Strategic Investment Subsidiaries and their respective Subsidiaries) or any of their respective assets;
(p) Synthetic Lease Obligations under the Permitted Synthetic Lease and, Disqualified Stock so long as no Default or Event of Default has occurred and preferred stock that may be incurred pursuant to the foregoing, together with any outstanding amounts incurred by Restricted Subsidiaries that are not Guarantors under (i) the first paragraph of this Section 10.1 or (ii) clause (c) of the definition of Permitted Other Indebtedness by Restricted Subsidiaries that are not Guarantors, shall not exceed the greater of (A) $550,000,000 and B) 50.0% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) is continuing at the time of incurrence at any one time outstandingthereof, or (y) Persons that are acquired by Holdings or any Restricted Subsidiary or merged into or consolidated with Holdings or a Restricted Subsidiary in accordance with the terms hereof (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving effect to any such acquisition, merger, consolidation or designation described in this clause (n), either: (i) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, (1) 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 paragraph of this Section 10.1 or (2) the Fixed Charge Coverage Ratio of Holdings and the Restricted Subsidiaries is equal to or greater than that immediately prior to such acquisition, merger, consolidation or designation, (ii) either (1) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a pari passu basis with the Liens on the Collateral securing the other Synthetic Lease Obligations, provided the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio aggregate Attributable Indebtedness in respect of all of the foregoing shall not exceed at the time of the incurrence of any thereof 3% of Net Worth as of the end of the fiscal quarter immediately preceding such incurrence;
(calculated on q) so long as no Default or Event of Default has occurred and is continuing at the time of incurrence thereof, Indebtedness arising in connection with a Pro Forma BasisPermitted Accounts Securitization; and
(r) shall be either any extensions, renewals or refinancings (Abut not increases) less than or equal to of the Consolidated First Lien Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.00:1.00, (2) if such Indebtedness, Disqualified Stock or shares of preferred stock is secured by a Lien on the Collateral on a junior priority basis with the Liens on the Collateral securing the Obligations, the Consolidated Senior Secured Debt to Consolidated EBITDA Ratio (calculated on a Pro Forma Basis) shall be either (A) less than or equal to the Consolidated Secured Debt to Consolidated EBITDA Ratio immediate prior to such acquisition, merger, consolidation or designation or (B) less than or equal to 5.50:1.00 or (3) if such Indebtedness, Disqualified Stock or shares of preferred stock is (x) unsecured or (y) is secured by assets that do not become Collateral, theforegoing.
Appears in 1 contract
Sources: Term Loan Credit Agreement (Fidelity National Financial, Inc.)