Limitation on Restricted Payments. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly: (1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company); (2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company; (3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or (4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment: (1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment; (2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and (3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of: (a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus (b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus (c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus (d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit: (1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture; (2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph; (3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness; (4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis; (5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period; (6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise; (7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer; (8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or (9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.
Appears in 4 contracts
Sources: Fourth Supplemental Indenture (Whiting Petroleum Corp), Fifth Supplemental Indenture (Whiting Petroleum Corp), First Supplemental Indenture (Whiting Petroleum Corp)
Limitation on Restricted Payments. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, take the following actions:
(1) declare or pay any dividend on, or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitationto holders of, any payment in connection with any merger or consolidation to which shares of Capital Stock of the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Subsidiary (other than dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) shares of Qualified Capital Stock of the Company or payable in options, warrants or other rights to the Company or a Restricted Subsidiary purchase Qualified Capital Stock of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct or indirect parent Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company);
(3) make any principal payment on or with respect to, or purchaserepurchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled repayment principal payment, scheduled sinking fund payment or scheduled maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except a payment, purchase, redemption, defeasance or other acquisition of in any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year case out of the date proceeds of such payment, purchase, redemption, defeasance or other acquisitionPermitted Refinancing Indebtedness; or
(4) make any Restricted Investment Investment; (all such payments and or other actions set forth described in these clauses (1i) through (4iv) above being collectively referred to as “Restricted Payments”), unless, unless at the time of and after giving effect to such the proposed Restricted Payment:
(1I) no Default or Event of Default has shall have occurred and is continuing or would occur as a consequence of such Restricted Paymentbe continuing;
(2II) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of accordance with Section 4.094.09(a) hereof; and
(3III) such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made by the Company and its Restricted Subsidiaries after May 11January 1, 2004 shall not exceed the sum (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7without duplication) and (8) of the next succeeding paragraph), is less than the sum, without duplication, offollowing:
(aA) 50% of the Consolidated Net Income of the Company for accrued on a cumulative basis during the period (taken as one accounting period) from April beginning on January 1, 2004 to and ending on the end last day of the Company’s most recently ended last fiscal quarter for which internal financial statements are available at ending prior to the time date of such proposed Restricted Payment (or, if such Consolidated Net Income for such period is shall be a deficitloss, less minus 100% of such deficitloss), ; plus
(bB) 100% of the aggregate net cash proceeds Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (including other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the fair market value Company or any options, warrants or rights to purchase such shares of any Additional Assets to Qualified Capital Stock of the extent acquired in consideration Company; plus
(C) the aggregate Net Cash Proceeds, or the Fair Market Value of Equity Interests of Property other than cash, received after January 1, 2004 by the Company (other than Disqualified Stock)from any of its Restricted Subsidiaries) since May 11upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus
(D) the aggregate Net Cash Proceeds received after January 1, 2004 as a contribution to its common equity capital or by the Company from the issue issuance or sale of Equity Interests of the Company (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Capital Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Qualified Capital Stock or debt securities) sold to a Subsidiary of the Company), together with the aggregate cash received by the Company at the time of such conversion or exchange; plus
(cE) to the extent that any not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Investment that was made Subsidiary after May 11January 1, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that from any Unrestricted Subsidiary or from the redesignation of the Company is redesignated an Unrestricted Subsidiary as a Restricted Subsidiary after May 11(valued in each case as provided in the definition of “Investment”), 2004, not to exceed in the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment case of any dividend or distribution or Unrestricted Subsidiary the consummation total amount of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale Investments (other than to a Permitted Investments) in such Unrestricted Subsidiary of the Company) of, Equity Interests of made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004.
(other than Disqualified Stockb) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
), (5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
and (7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (abelow) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing continuing:
(1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above);
(2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company;
(3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company;
(4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company;
(5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes;
(6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and
(7) other Restricted Payments in an aggregate amount not to exceed $10,000,000; and The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be caused thereby. available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a).
(c) The amount of all Restricted Payments (other than cash) will be the fair market value Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value .
(d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of any assets or securities that the relevant period for which audited financial statements are required to be valued by this covenant will be determined, in available on the case date of amounts under $50.0 million, by an officer determination and unaudited financial statements and other current financial data based on the books and records of the Company and, for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the case of amounts of $50.0 million or more, by financial statements and other financial data derived from the Board of Directors books and records of the Company, whose determination shall be evidenced by a Board Resolution. Not later than Company that are available on the date of making any determination. If the Company makes a Restricted Payment (excluding any Restricted Payment described in which, at the preceding clause (2), (3), (4), (6), (7) or (8)) time of the Company will deliver to the Trustee an Officers’ Certificate stating that making of such Restricted Payment is would in the good faith determination of the Company be permitted and setting forth under the basis upon which the calculations required by requirements of this Section 4.07 were computed. For purposes of determining Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Section 4.07, Indenture notwithstanding any subsequent adjustments made in good faith to the event that a Restricted Payment meets the criteria of more than one Company’s financial statements affecting Consolidated Net Income of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in for any manner that complies with this Section 4.07period.
Appears in 4 contracts
Sources: Indenture (Comstock Oil & Gas, LP), Indenture (Comstock Oil & Gas, LP), Indenture (Comstock Oil & Gas, LP)
Limitation on Restricted Payments. (a) The Company will not, and will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly:, take any of the following actions (each, a “Restricted Payment”):
(1i) declare or pay any dividend or make any other payment or distribution on account with respect to any of the Company’s or any of its Restricted Subsidiaries’ Subsidiary’s Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which involving the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Subsidiary (other than dividends dividends, payments or distributions (x) payable in Equity Interests (other than Disqualified Stock) of the Company or payable (y) to the Company or a Restricted Subsidiary of the CompanySubsidiary));
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which involving the Company is a partyor any Restricted Subsidiary) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3iii) call for redemption or make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated value, prior to the Notes or the Subsidiary Guarantees prior to Stated Maturity thereof, any scheduled repayment or scheduled maturity, Subordinated Indebtedness except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness (a) in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereoffinal maturity, in each case, case due within one year of the date of such payment, purchase, redemption, defeasance purchase or other acquisition, or (b) intercompany Indebtedness permitted to be Incurred pursuant to Section 4.03(b)(6); or
(4iv) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”than a Permitted Investment), ; unless, at the time of and after giving pro forma effect to such Restricted Payment:
(1) (x) in the case of an Investment (other than a Permitted Investment), no Default or Specified Event of Default has shall have occurred and is be continuing or would occur as a consequence thereof, and (y) in the case of such any other Restricted Payment, no Event of Default will have occurred and be continuing or would occur as a consequence thereof;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage as Ratio test set forth in the first paragraph of Section 4.09Debt; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its the Restricted Subsidiaries after May 11April 1, 2004 2021 (excluding including Restricted Payments permitted by clauses (2), (3), (4), (6), 1) and (7) and (8) of the next succeeding paragraphSection 4.04(b), but excluding all other Restricted Payments permitted by Section 4.04(b)), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.
Appears in 3 contracts
Sources: Indenture (Cogent Communications Holdings, Inc.), Indenture (Cogent Communications Holdings, Inc.), Indenture (Cogent Communications Holdings, Inc.)
Limitation on Restricted Payments. The Company will notnot make, and will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, make, any Restricted Payment, unless:
(1a) declare no Default or pay any dividend or make any other payment or distribution on account Event of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments Default shall have occurred and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, be continuing at the time of and or immediately after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2b) the Company would, at the time of such Restricted Payment and immediately after giving pro forma effect thereto as if to such Restricted Payment had been made at Payment, the beginning of the applicable four-quarter period, have been permitted to Company could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of (other than Permitted Indebtedness) under Section 4.094.10; and
(3c) immediately after giving effect to such Restricted Payment, together with the aggregate of all Restricted Payments declared or made after the Existing Notes Issue Date does not exceed the sum of (without duplication):
(1) 100% of the Company’s Cumulative EBITDA minus 1.4 times the Company’s Cumulative Consolidated Interest Expense; plus
(2) 100% of the aggregate Net Proceeds and the fair market value of securities or other property received by the Company, after January 1, 2001, from (a) the issue or sale of Capital Stock (other than Disqualified Capital Stock or Capital Stock of the Company issued to any Subsidiary of the Company) of the Company or any Indebtedness or other securities of the Company convertible into or exercisable or exchangeable for Capital Stock (other than Disqualified Capital Stock) of the Company which has been so converted or exercised or exchanged, as the case may be, (b) any capital contribution to the Company from Parent (except as contemplated by clause (vi) of the following paragraph), and (c) any loans made to the Company by Parent prior to the Existing Notes Issue Date upon the cancellation of such loans by Parent; plus
(3) the net reductions in Investments (other than reductions in Permitted Investments) in any Person resulting from payments of interest on Indebtedness, dividends, repayments of loans, partial or total releases or discharges of Guaranteed Permitted Unrestricted Subsidiary Obligations, or from designations of Unrestricted Subsidiaries as Restricted Subsidiaries, valued in each case at the fair market value thereof, not to exceed the amount of all other Restricted Payments Investments previously made by the Company and its Restricted Subsidiaries in such Person. For purposes of determining under this clause (c) the amount expended for Restricted Payments, cash distributed shall be valued at the face amount thereof and property other than cash shall be valued at its fair market value as determined by the Board of Directors of the Company reasonably and in good faith. Notwithstanding the foregoing, the Company and any of the Restricted Subsidiaries may pay any dividend or make any distribution to the Parent for the purpose of funding a payment of any dividend or making of any distribution on or in respect of shares of the Parent’s Capital Stock, in the case of each such dividend or distribution by the Company or any of the Restricted Subsidiaries constituting a Restricted Payment, to the extent that the Parent believes in good faith that it qualifies as a “real estate investment trust” under Section 856 of the Code (or any successor provision) and that the declaration or payment of a dividend or making of a distribution in such amount is necessary to maintain the Parent’s status as a REIT for any taxable year, with such dividend to be paid or distribution to be made as and when determined by the Parent, whether during or after May 11the end of the relevant taxable year; provided, 2004 however, that (excluding Restricted Payments permitted by clauses (2i) at the time of, and after giving effect to, any such dividend or distribution, no Event of Default under Section 6.01(1), (3), 2) (4without giving effect to the grace period set forth therein), (6), ) or (7) shall have occurred and (8) be continuing or would occur as a consequence thereof and the obligations in respect of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that notes shall not otherwise have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) accelerated and (ii) two consecutive dividends or distributions pursuant to this paragraph shall not be permitted during the initial amount pendency of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary single Event of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted SubsidiaryDefault. The preceding provisions will of this Section 4.11 shall not prohibit:
(1i) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may bethereof, if the dividend, distribution or redemption payment on the at such date of declaration or the date of the notice of redemption, as the case may be, such payment would have complied comply with the provisions of this Indenture; provided, however, that in calculating the Indentureaggregate amount of Restricted Payments for purposes of Section 4.11(c), such amounts declared shall be included in the calculation but such amounts expended shall be excluded from the calculation;
(2ii) the redemption, repurchase, retirement, defeasance or other acquisition retirement of any subordinated shares of Capital Stock of the Company or Indebtedness of the Company which is subordinated or any Guarantor pari passu in right of payment to the Notes by conversion into, or of any Equity Interests of the Company by or in exchange for, shares of Capital Stock (other than Disqualified Capital Stock), or out of the net cash proceeds Net Proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of other shares of Capital Stock of the Company (other than Disqualified Capital Stock); provided, with a sale being deemed substantially concurrent if such redemptionhowever, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds Net Proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will retirement shall be excluded from clause (3)(bc)(2) of this Section 4.11, provided further, however, that in calculating the preceding paragraphaggregate amount of Restricted Payments for purposes of Section 4.11(c), amounts expended pursuant to this clause (ii) shall be excluded from the calculation;
(3iii) the defeasance, redemption, repurchase, redemption or retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with which is subordinated in right of payment to the net cash proceeds from an incurrence of, or Notes in exchange for, Permitted Refinancing Indebtedness;
by conversion into, or out of the Net Proceeds of, a substantially concurrent sale or incurrence of Indebtedness (4it being understood that a redemption or retirement or irrevocable deposit for redemption or retirement of Indebtedness within 45 days of such sale or incurrence shall be deemed “substantially concurrent”) of the payment of Company (other than any dividend or distribution by Indebtedness owed to a Restricted Subsidiary of the Company to the holders Company) that is, contractually subordinated in right of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect payment to the Notes to at least the same extent as the subordinated Indebtedness being redeemed or retired and (x) has completed a Stated Maturity no earlier than the repurchase final maturity date of the Indebtedness being redeemed or redemption retired and (y) has an Average Life to Stated Maturity equal to or greater than the remaining Average Life to Stated Maturity of all Notes validly tendered for payment in connection with such Change of Control Offer the Indebtedness being redeemed or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 millionretired; provided, however, that at the time of, and after giving effect to, amount of any Restricted Payment permitted under the preceding such Net Proceeds that are utilized for any such redemption or retirement shall be excluded from clause (9), no Default or Event c)(2) of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.074.11, provided further, however, that in calculating the event that a Restricted Payment meets the criteria of more than one of the categories aggregate amount of Restricted Payments described in the preceding clauses (1for purposes of Section 4.11(c) through (9), or is entitled to be made amounts expended pursuant to this clause (iii) shall be excluded from the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.calculation;
Appears in 3 contracts
Sources: Indenture (Lamar Media Corp/De), Indenture (Lamar Media Corp/De), Indenture (Lamar Media Corp/De)
Limitation on Restricted Payments. The Company will not, and will not cause or permit any of its the Restricted Subsidiaries to, directly or indirectly:
(1a) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests Qualified Capital Stock of the Company) on or in respect of shares of its Capital Stock to holders of such Capital Stock (other than Disqualified Stockincluding by means of a Person (including an Unrestricted Subsidiary) making such a payment with the proceeds of an Investment made by the Company or payable to the Company or a any Restricted Subsidiary of the CompanySubsidiary);
(2b) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct warrants, rights or indirect parent options to purchase or acquire shares of any class of such Capital Stock (including by means of a Person (including an Unrestricted Subsidiary) making such a payment with the Companyproceeds of an Investment made by the Company or any Restricted Subsidiary);
(3c) make any principal payment on or with respect toon, or purchase, redeem, defease defease, retire or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled repayment principal payment, sinking fund or scheduled maturity, except a paymentany Subordinated Indebtedness (other than the principal payment on, or the purchase, redemption, defeasance defeasance, retirement or other acquisition for value of, Subordinated Indebtedness made in satisfaction of any such Indebtedness in or anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due final maturity within one year of the due date of such paymentobligation, purchase, redemption, defeasance installment or other acquisitionfinal maturity); or
(4d) make any Restricted Investment (all such payments and other than Permitted Investments) (each of the foregoing actions set forth in these clauses (1a), (b), (c) through and (4d) above being collectively referred to as a “Restricted PaymentsPayment”), unless, if at the time of and such Restricted Payment or immediately after giving effect to such Restricted Paymentthereto:
(1) no a Default or an Event of Default has shall have occurred and is continuing or would occur as a consequence of such Restricted Paymentbe continuing;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted is not able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)Permitted Indebtedness) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital in compliance with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such saleSection 4.03; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;or
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (including such proposed Restricted Payment) made after March 31, 2003 (the amount expended for such purpose, if other than in cash) will be , being the fair market value on the date Fair Market Value of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, property as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, determined reasonably and in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, good faith by the Board of Directors of the Company, whose determination ) shall be evidenced by a Board Resolution. Not later than exceed the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.sum of:
Appears in 3 contracts
Sources: Indenture (Tenneco Inc), Indenture (Tenneco Inc), Indenture (Tenneco Inc)
Limitation on Restricted Payments. The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary Qualified Capital Stock of the Company)) on or in respect of shares of the Company's Capital Stock to holders of such Capital Stock;
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct warrants, rights or indirect parent options to purchase or acquire shares of the Companyany class of such Capital Stock;
(3) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled final maturity, scheduled redemption or repayment or scheduled maturity, except a sinking fund payment, purchase, redemption, defeasance any Subordinated Indebtedness (other than intercompany Indebtedness among the Company and/or the Guarantors which Indebtedness was permitted to be incurred pursuant to clause (6) or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year (7) of the date definition of such payment, purchase, redemption, defeasance or other acquisition"Permitted Indebtedness"); or
(4) make any Restricted Investment (all such payments and other than Permitted Investments) (each of the foregoing actions set forth in these clauses (1), (2), (3) through and (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such a "Restricted Payment:
(1") no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, if at the time of such Restricted Payment and or immediately after giving pro forma effect thereto as if such Restricted Payment had been made at thereto,
(i) a Default or an Event of Default shall have occurred and be continuing; or
(ii) the beginning of the applicable four-quarter period, have been permitted Company is not able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth (other than Permitted Indebtedness) in the first compliance with paragraph (a) of Section 4.094.9 hereof; andor
(3iii) such Restricted Payment, together with the aggregate amount of all other Restricted Payments (including such proposed Restricted Payment) made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 subsequent to the end of Issue Date (the Company’s most recently ended fiscal quarter amount expended for which internal financial statements are available at the time of such Restricted Payment (orpurposes, if such Consolidated Net Income for such period is a deficitother than in cash, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including being the fair market value of any Additional Assets to the extent acquired such property as determined in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, good faith by the Board of Directors of the Company, whose determination ) shall be evidenced by a Board Resolution. Not later than exceed the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.sum of:
Appears in 3 contracts
Sources: Indenture (Dole Food Co Inc), Indenture (Dole Food Co Inc), Indenture (Dole Food Company Inc)
Limitation on Restricted Payments. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1i) declare or pay any dividend on, or make any other payment or distribution on account in respect of, any shares of the Company’s or any Subsidiary’s Capital Stock (excluding dividends or distributions payable in shares of its Restricted Subsidiaries’ Equity Interests the Company’s Capital Stock or in options, warrants or other rights to purchase such Capital Stock, but including dividends or distributions payable in Redeemable Capital Stock or in options, warrants or other rights to purchase Redeemable Capital Stock (including, without limitation, other than dividends on such Redeemable Capital Stock payable in shares of such Redeemable Capital Stock)) held by any payment in connection with any merger or consolidation to which Person other than the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Wholly Owned Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);; or
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to Capital Stock of the Notes Company or any Affiliate thereof (other than any Wholly Owned Subsidiary of the Subsidiary Guarantees prior to Company and except for investments in Capital Stock of entities which are or become Affiliates as a result of the Company’s ownership of equity interests in such entities) or any scheduled repayment or scheduled maturityoptions, except a payment, purchase, redemption, defeasance warrants or other acquisition of any rights to acquire such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionCapital Stock; or
(4) make any Restricted Investment (all such payments and or any other actions set forth described in these clauses (1i) through and (4ii) above being are collectively referred to as “Restricted Payments”), unless, ) unless at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such proposed Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemptionRestricted Payment, repurchaseif other than cash, retirementas determined by the Board of Directors, defeasance or other acquisition will whose determination shall be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution conclusive and evidenced by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
Board Resolution): (5A) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The continuing; (B) the Company could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) under the provisions of Section 4.05; and (C) the aggregate amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued Payments permitted by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2Section 4.06(b)(iv), (3v), (4vii) and (viii)) declared or made after January 1, 2014 (6), (7including the proposed Restricted Payment) or (8)) does not exceed the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.sum of:
Appears in 3 contracts
Sources: Indenture (Amc Entertainment Holdings, Inc.), Indenture (Amc Entertainment Holdings, Inc.), Indenture (Amc Entertainment Inc)
Limitation on Restricted Payments. (a) The Company will not, and will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly:indirectly (the payments and other actions described in the following clauses being collectively “Restricted Payments”):
(1i) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, other than dividends or distributions paid in the Company or any payment in connection with any merger or consolidation to which Parent Entity’s Qualified Equity Interests) held by Persons other than the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct Parent Entity held by Persons other than the Company or indirect parent any of the Companyits Restricted Subsidiaries;
(3iii) make any principal payment on or with respect to, or purchaserepay, redeem, repurchase, defease or otherwise acquire or retire for value value, or make any Indebtedness that is subordinated to the Notes payment on or the Subsidiary Guarantees prior to with respect to, any scheduled repayment Subordinated Debt (except (i) a payment of interest or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the at Stated Maturity thereofMaturity, in each case, due within one year of the date of such payment, purchaserepayment, redemption, repurchase or defeasance or other acquisition(ii) any Debt Incurred pursuant to Section 4.06(b)(2)); or
(4iv) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), than a Permitted Investment; unless, at the time of of, and after giving effect to such to, the proposed Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;thereof,
(2) either of the Company would, Relevant Conditions are satisfied at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at thereof, or the beginning of the applicable four-quarter period, have been permitted to incur Company could Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Debt under Section 4.09; 4.06(a), and
(3) such Restricted Payment, together with the aggregate amount of expended for all other Restricted Payments made by on or after the Company and its Restricted Subsidiaries after May 11Issue Date would not, 2004 subject to paragraph (excluding Restricted Payments permitted by clauses (2c), (3), (4), (6), (7) and (8) of exceed the next succeeding paragraph), is less than the sum, without duplication, sum of:
(aA) (i) in the event that either of the Relevant Conditions are not satisfied at the time thereof and after giving effect thereto, 50% of the aggregate amount of the Consolidated Net Income (or, if the Consolidated Net Income is a loss, minus 100% of the Company for amount of the period (loss) accrued on a cumulative basis during the period, taken as one accounting period) from April , beginning on October 1, 2004 to 2020 and ending on the end last day of the Company’s most recently ended completed fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07available; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.
Appears in 3 contracts
Sources: Indenture (UWM Holdings Corp), Indenture (UWM Holdings Corp), Indenture (UWM Holdings Corp)
Limitation on Restricted Payments. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:indirectly (each of the actions set forth in clauses (i), (ii), (iii) and (iv) below being referred to as a “Restricted Payment”):
(1i) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary Qualified Capital Stock of the Company)) on or in respect of shares of the Company’s Capital Stock to holders of such Capital Stock;
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct warrants, rights or indirect parent options to purchase or acquire shares of any class of such Capital Stock (other than any such Capital Stock or warrants, rights or options owned by the Company or any Restricted Subsidiary of the Company);
(3iii) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled final maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionSubordinated Indebtedness; or
(4iv) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”than Permitted Investments), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, ; if at the time of such Restricted Payment and or immediately after giving pro forma effect thereto as if such Restricted Payment had been made at thereto,
(a) a Default or an Event of Default shall have occurred and be continuing; or
(b) the beginning of the applicable four-quarter period, have been permitted Company is not able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth (other than Permitted Indebtedness) in the first paragraph of compliance with Section 4.094.04(a); andor
(3c) such Restricted Payment, together with the aggregate amount of all other Restricted Payments (including such proposed Restricted Payment) made subsequent to the Issue Date (the amount expended for such purposes, if other than in cash, being the fair market value of such property as determined in good faith by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) Board of Directors of the next succeeding paragraph), is less than Company) shall exceed the sum, without duplication, sum of:
(ai) 50% of the cumulative Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, or if such cumulative Consolidated Net Income for such period is shall be a deficitloss, less minus 100% of such deficitloss) of the Company from ___________ to the date the Restricted Payment occurs (the “Reference Date”) (treating such period as a single accounting period), ; plus
(bii) 100% of the aggregate net cash proceeds received by the Company (including or the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of marketable securities or other property) received by the Company from any Person (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company)) from the issuance and sale subsequent to ___________ and on or prior to the Reference Date of (1) Qualified Capital Stock of the Company, (2) warrants, options or other rights to acquire Qualified Capital Stock of the Company (but excluding any debt security that is convertible into, or exchangeable for, Qualified Capital Stock) or (3) convertible or exchangeable Disqualified Capital Stock or debt securities that have been converted or exchanged in accordance with their terms for Qualified Capital Stock; plus
(ciii) to the extent that without duplication of any Restricted Investment that was made after May 11amounts included in clause (c)(ii) above, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary 100% of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of aggregate net cash proceeds (i) or the fair market value of any marketable securities or other property) from any equity contribution received by the Company from a holder of the Company’s Investment Capital Stock subsequent to ___________ and on or prior to the Reference Date; plus
(iv) without duplication, the sum of:
(A) the aggregate amount returned in cash on or with respect to Investments (other than Permitted Investments) made subsequent to ___________ whether through interest payments, principal payments, dividends or other distributions or payments;
(B) the net cash proceeds received by the Company or any of its Restricted Subsidiaries from the disposition of all or any portion of such Investments (other than to a Restricted Subsidiary of the Company); and
(C) upon redesignation of an Unrestricted Subsidiary as of a Restricted Subsidiary, the date of such redesignation or (ii) such fair market value as of such Subsidiary; provided, however, that the date on which sum of clauses (A), (B) and (C) above shall not exceed the aggregate amount of all such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding Investments made subsequent to the Issue Date.
(b) Notwithstanding the foregoing, the provisions will of paragraph (a) of this Section 4.02 do not prohibit:
(1i) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment dividend would have been permitted on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenturedeclaration;
(2ii) the redemption, repurchase, purchase, retirement, defeasance or other acquisition of any shares of Capital Stock of the Company, either (A) solely in exchange for shares of Qualified Capital Stock of the Company or (B) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Restricted Subsidiary of the Company) of shares of Qualified Capital Stock of the Company, provided that such net proceeds are not included in the calculation described in clause (c) of the preceding paragraph;
(iii) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Subordinated Indebtedness either (A) solely in exchange for shares of Qualified Capital Stock of the Company or any Guarantor or of any Equity Interests of the Company in exchange forCompany, or out (B) through the application of the net cash proceeds of the a substantially concurrent sale for cash (other than to a Restricted Subsidiary of the Company) of, Equity Interests of (I) shares of Qualified Capital Stock of the Company or (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; II) Refinancing Indebtedness provided that the amount of any such net cash proceeds that are utilized for any such not included in the calculation described in clause (c) of the preceding paragraph;
(iv) so long as no Default or Event of Default shall have occurred and be continuing redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) by the Company of Common Stock of the preceding paragraph;
(3) the defeasanceCompany from officers, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness directors and employees of the Company or any Guarantor of its Subsidiaries or their authorized representatives upon the death, disability or termination of employment of such employees or termination of their seat on the board of the Company, in an aggregate amount not to exceed the sum of (x) $250,000 plus (y) $100,000 in any calendar year since the Issue Date, with any unused amounts in such calendar year being carried forward to the net cash proceeds from an incurrence of, or next succeeding calendar year; provided that the aggregate amount of repurchases that may be made pursuant to this clause (4) in exchange for, Permitted Refinancing Indebtednessany calendar year shall not exceed $250,000 in any calendar year;
(4v) so long as no Default or Event of Default shall have occurred and be continuing, Restricted Payments in an aggregate amount not to exceed $6.0 million;
(vi) repurchases of Qualified Capital Stock deemed to occur upon the exercise of stock options, warrants or other convertible or exchangeable securities to the extent such Qualified Capital Stock represents a portion of the exercise price of those stock options, warrants or other convertible or exchangeable securities;
(vii) the payment of any dividend (or, in the case of any partnership or distribution limited liability company, any similar distribution) by a Restricted Subsidiary of the Company to the holders of its Equity Interests Capital Stock on a pro rata basis;
(5viii) the repurchase, redemption repurchase of Capital Stock deemed to occur upon the exercise of stock options to the extent such Capital Stock represents a portion of the exercise price of those stock options;
(ix) payments of cash in lieu of issuing fractional shares upon (i) the exercise of options or other acquisition warrants or retirement for value (ii) the exchange or conversion of Qualified Capital Stock of any Equity Interests such Person; and
(x) the declaration and payment of dividends to holders of any class or series of Disqualified Capital Stock of the Company or any Restricted Subsidiary Preferred Stock of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control incurred in accordance with provisions similar to the Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, 4.04. If the Company has made the Change of Control Offer or Asset Sale Offermakes a Restricted Payment which, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment making of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case good faith determination of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination would be permitted under the requirements of this Indenture, such Restricted Payment shall be evidenced by a Board Resolutiondeemed to have been made in compliance with this Indenture notwithstanding any subsequent adjustment made in good faith to the Company’s financial statements affecting Consolidated Net Income. Not later than In determining the date aggregate amount of making any Restricted Payment (excluding any Restricted Payment described Payments made subsequent to the Issue Date in the preceding accordance with clause (2c) of Section 4.02(a), amounts expended pursuant to clauses (i), (3ii)(B), (4), iii)(B)(II) and (6), (7iv) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that shall be included in such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07calculation.
Appears in 3 contracts
Sources: Third Supplemental Indenture (General Finance CORP), Second Supplemental Indenture (General Finance CORP), Second Supplemental Indenture (General Finance CORP)
Limitation on Restricted Payments. The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
, (1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary Qualified Capital Stock of the Company);
) on or in respect of shares of the Company's Capital Stock to holders of such Capital Stock; (2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct warrants, rights or indirect parent options to purchase or acquire shares of any class of such Capital Stock of the Company;
; (3) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled final maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date Company that is subordinate or junior in right of such payment, purchase, redemption, defeasance payment to the Securities (other than Indebtedness described in clause (7) of the definition of "Permitted Indebtedness"); or other acquisition; or
(4) make any Restricted Investment (all such payments and other than Permitted Investments) (each of the foregoing actions set forth in these clauses (1), (2), (3) through and (4) above being collectively referred to as “a "Restricted Payments”Payment"), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, if at the time of such Restricted Payment and or immediately after giving pro forma effect thereto as if such Restricted Payment had been made at thereto:
(a) a Default or an Event of Default shall have occurred and be continuing; or
(b) the beginning of the applicable four-quarter period, have been permitted Company is not able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth (other than Permitted Indebtedness) in the first paragraph of compliance with Section 4.094.4; andor
(3c) such Restricted Payment, together with the aggregate amount of all other Restricted Payments (including such proposed Restricted Payment) made subsequent to November 14, 2000 (the amount expended for such purposes, if other than in cash, being the fair market value of such property as determined reasonably and in good faith by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) Board of Directors of the next succeeding paragraph), is less than Company whose determination will be conclusive) shall exceed the sum, without duplication, sum of:
(ai) 50% of the cumulative Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, or if such cumulative Consolidated Net Income for such period is shall be a deficitloss, less minus 100% of such deficitloss) of the Company earned subsequent to November 14, 2000 and on or prior to the date the Restricted Payment occurs (the "Reference Date") (treating such period as a single accounting period), ; plus
(bii) 100% of the aggregate Net Cash Proceeds and the fair market value, as determined in good faith by the Board of Directors of the Company, of property other than cash received by the Company from any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to November 14, 2000 and on or prior to the Reference Date of Qualified Capital Stock of the Company (other than Excluded Contributions); plus
(iii) without duplication of any amounts included in clause (c)(ii) above, 100% of the aggregate Net Cash Proceeds of any equity contribution received by the Company from a holder of the Company's Capital Stock (other than Excluded Contributions) after November 14, 2000; plus
(iv) the amount by which Indebtedness of the Company or any of its Restricted Subsidiaries is reduced on the Company's balance sheet upon the conversion or exchange subsequent to November 14, 2000 of any Indebtedness of the Company or any of its Restricted Subsidiaries incurred after November 14, 2000 into or for Qualified Capital Stock; plus
(v) without duplication, the sum of:
(A) the aggregate amount returned in cash on or with respect to Investments (other than Permitted Investments) made subsequent to November 14, 2000 whether through interest payments, principal payments, dividends or other distributions or payments;
(B) the net cash proceeds received by the Company (including the fair market value of or any Additional Assets to the extent acquired in consideration of Equity Interests Restricted Subsidiary of the Company from the disposition of all or any portion of such Investments (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus; and
(cC) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser upon redesignation of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any an Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11Subsidiary, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary (valued in each case as provided in the definition of "Investment"); provided, however, that the date sum of clauses (A), (B) and (C) above shall not exceed the aggregate amount of all such redesignation Investments made by the Company or (ii) such fair market value as of any Restricted Subsidiary in the date on which such relevant Person or Unrestricted Subsidiary was originally designated as an Unrestricted Subsidiarysubsequent to November 14, 2000. The Notwithstanding the foregoing, the provisions set forth in the immediately preceding provisions will paragraph do not prohibit:
(1) the payment of any dividend or other distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, other distribution if the dividend, dividend or other distribution or redemption payment would have been permitted on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenturedeclaration;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing continuing, the acquisition of any shares of Capital Stock of the Company, either (a) solely in exchange for shares of Qualified Capital Stock of the Company or would be caused thereby. The amount Qualified Capital Stock of all Restricted Payments RPP Inc. or (b) through the application of net proceeds of a substantially concurrent sale for cash (other than cash) will be the fair market value on the date to a Subsidiary of the Restricted Payment Company) of shares of Qualified Capital Stock of the asset(sCompany or, to the extent the proceeds therefrom are contributed by RPP Inc. to the Company, from the shares of Capital Stock of RPP Inc.;
(3) if no Default or securities proposed Event of Default shall have occurred and be continuing, the acquisition of any Indebtedness of the Company that is subordinate or junior in right of payment to the Securities either (a) solely in exchange for shares of Qualified Capital Stock of the Company or RPP Inc., or (b) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of (I) shares of Qualified Capital Stock of the Company or RPP Inc., or (II) Refinancing Indebtedness;
(4) if no Default or Event of Default shall have occurred and be transferred or issued continuing, repurchases by the Company or any Restricted Subsidiary of the Company of, or dividends, distributions or advances to RPP Inc. made on or after November 14, 2000 to allow RPP Inc. to repurchase (and/or to make payments on notes theretofore issued by RPP Inc. representing the consideration for the previous repurchase of), securities of RPP Inc., RPP Holdings or the Company from employees, directors or consultants of RPP Inc., the Company or any Subsidiaries of the Company or their authorized representatives (a) upon the death, disability or termination of employment of such Restricted Subsidiaryemployees, as directors or consultants or to the case may be, extent required pursuant to employee benefit plans, employment agreements or consulting agreements or (b) pursuant to any other agreements with such employees or directors of or consultants to RPP Inc., the Company or any Subsidiaries of the Company, in an aggregate amount not to exceed $7.5 million in any calendar year (with unused amounts in any calendar year being carried over to succeeding years subject to a maximum of $15.0 million in any calendar year), provided that the cancellation of Indebtedness owing to the Company or any Restricted Payment. The fair market value Subsidiary of the Company from such employees, directors or consultants of the Company or any of its Restricted Subsidiaries in connection with a repurchase of Capital Stock of the Company will not be deemed to constitute a Restricted Payment under this Indenture;
(5) the declaration and payment of dividends to holders of any assets class or securities series of Preferred Stock of the Company, provided that for the most recently ended four full fiscal quarters for which internal financial statements are required available immediately preceding the date of issuance of such Preferred Stock, after giving effect to be valued by this covenant will be determinedsuch issuance on a pro forma basis, the Company would have been able to incur at least $1.00 of Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.4;
(6) the payment of dividends on the Company's Common Stock (or dividends, distributions or advances to RPP Inc. to allow RPP Inc. to pay dividends on RPP Inc.'s Common Stock), following the first public offering of the Company's Common Stock (or of RPP Inc.'s Common Stock) after the Issue Date, of (i) in the case of amounts under $50.0 million, by an officer the first public offering of the Company's Common Stock, up to 6% per annum of the net proceeds received by the Company andin such public offering, or (ii) in the case of amounts the first public offering of RPP Inc.'s Common Stock, up to 6% per annum of the amount contributed by RPP Inc. from the proceeds received by RPP Inc. from such offering, other than, in each case, public offerings with respect to the Company's Common Stock (or RPP Inc.'s Common Stock) registered on Form S-8 (or any successor form);
(7) the payment of dividends, distributions or advances to RPP Inc. to allow RPP Inc. to repurchase, retire or otherwise acquire or retire for value equity interests of RPP Inc., in existence on November 14, 2000 and from the Persons holding such equity interests on November 14, 2000 and which are not held by Apollo or any of its Affiliates or members of management of the Company and its Subsidiaries on November 14, 2000 (including any equity interests issued in respect of such equity interests as a result of a stock split, recapitalization, merger, combination, consolidation or similar transaction), provided, however, that the Company shall be permitted to make Restricted Payments under this clause only if after giving effect thereto, the Company would be permitted to incur at least $50.0 million 1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.4;
(8) other Restricted Payments made after November 14, 2000 in an aggregate amount not to exceed $20.0 million;
(9) if no Default or moreEvent of Default shall have occurred and be continuing, payments or distributions to, or dividends, distributions or advances to RPP Inc. to allow RPP Inc. to make payments or distributions to, dissenting stockholders pursuant to applicable law, pursuant to or in connection with a consolidation, merger or transfer of assets that complies with the provisions of this Indenture applicable to mergers, consolidations and transfers of all or substantially all of the property and assets of the Company;
(10) Investments that are made with Excluded Contributions;
(11) any payments made to consummate the Transactions pursuant to or contemplated by the Master Sale Agreement, the Non-US Sale Agreement, the Transaction Documents, the Non-US Transaction Documents (as such terms are defined in the Master Sale Agreement), and any other agreements related to the Recapitalization in effect on the closing date of the Recapitalization, including payments made by the Company to RPP Inc. to allow RPP Inc. to satisfy its obligations under such agreements or documents, in each case, as such agreements or documents are in effect on November 14, 2000 as amended from time to time so long as such amendment is in the good faith judgment of the Board of Directors of the Company not more disadvantageous to the Holders of the Securities in any material respect than such agreement or document as in effect on November 14, 2000;
(12) repurchases of Capital Stock deemed to occur upon the exercise of stock options, warrants or other convertible securities, to the extent such Capital Stock represents a portion of the consideration for such exercise;
(13) payment of dividends, other distributions or other amounts by the Company to RPP Inc. in amounts required for RPP Inc. to pay franchise taxes and other fees required to maintain its existence and provide for all other operating costs of RPP Inc., including, without limitation, in respect of director fees and expenses, administrative, legal and accounting services provided by third parties and other costs and expenses, including all costs and expenses with respect to filings with the Commission, of up to $2.5 million per fiscal year;
(14) the acquisition of any shares of Disqualified Capital Stock of the Company either (a) solely in exchange for shares of Disqualified Capital Stock of the Company or Capital Stock of RPP Inc. or (b) through the application of the net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Disqualified Capital Stock of the Company or, to the extent the proceeds therefrom are contributed by RPP Inc. to the Company, whose determination shall be evidenced from shares of Capital Stock of RPP Inc.;
(15) any purchase or redemption of Indebtedness that ranks junior to the Securities utilizing any Net Cash Proceeds remaining after the Company has complied with the requirements of the covenants described under Sections 4.17 and 4.18;
(16) the payment of dividends, other distributions or amounts by a Board Resolution. Not later than the date Company to RPP Inc. in amounts required to pay the tax obligations of making the Company and its Subsidiaries and the tax obligations of RPP Inc. or any Restricted Payment of its direct or indirect parent attributable to the Company and its Subsidiaries; provided that (excluding any Restricted Payment described in x) the preceding amount of dividends paid pursuant to this clause (2), 16) to enable RPP Inc. or any of its direct or indirect parents to pay Federal and state income taxes at any time shall not exceed the amount of such Federal and state income taxes actually owing by RPP Inc. or any of its direct or indirect parents at such time for the respective period and (3), (4), (6), (7y) any refunds received by RPP Inc. or (8)) any of its direct or indirect parents attributable to the Company will deliver and its Subsidiaries shall promptly be returned by RPP Inc. or any of its direct or indirect parents to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted Company; and
(17) if no Default or Event of Default shall have occurred and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes be continuing, payments of determining compliance with this Section 4.07cash, or dividends, distributions or advances made after November 14, 2000 to RPP Inc. to allow RPP Inc. to make payments of cash, in the event that a Restricted Payment meets the criteria of more than one lieu of the categories issuance of Restricted Payments described in fractional shares upon the preceding clauses (1) through (9)exercise of warrants or upon the conversion or exchange of, or is entitled to be made pursuant to the first paragraph issuance of this Section 4.07Capital Stock in lieu of cash dividends on, any Capital Stock of RPP Inc., the Company will be permitted to divide or classify (or later divided or classify or reclassify any Restricted Subsidiary, which in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.the aggregate do not exceed $3.0
Appears in 2 contracts
Sources: Indenture (RPP Capital Corp), Indenture (RPP Capital Corp)
Limitation on Restricted Payments. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1i) declare or pay any dividend on, or make any other payment or distribution on account in respect of, any shares of the Company’s or any Subsidiary’s Capital Stock (excluding dividends or distributions payable in shares of its Restricted Subsidiaries’ Equity Interests the Company’s Capital Stock or in options, warrants or other rights to purchase such Capital Stock, but including dividends or distributions payable in Redeemable Capital Stock or in options, warrants or other rights to purchase Redeemable Capital Stock (including, without limitation, other than dividends on such Redeemable Capital Stock payable in shares of such Redeemable Capital Stock)) held by any payment in connection with any merger or consolidation to which Person other than the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Wholly Owned Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);; or
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to Capital Stock of the Notes Company or any Affiliate thereof (other than any Wholly Owned Subsidiary of the Subsidiary Guarantees prior to Company) or any scheduled repayment or scheduled maturityoptions, except a payment, purchase, redemption, defeasance warrants or other acquisition of any rights to acquire such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionCapital Stock; or
(4) make any Restricted Investment (all such payments and or any other actions set forth described in these clauses (1i) through and (4ii) above being are collectively referred to as “Restricted Payments”), unless, ) unless at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such proposed Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemptionRestricted Payment, repurchaseif other than cash, retirementas determined by the Board of Directors, defeasance or other acquisition will whose determination shall be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution conclusive and evidenced by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
Board Resolution): (5A) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The continuing; (B) the Company could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) under the provisions of Section 4.05; and (C) the aggregate amount of all Restricted Payments (other than cashRestricted Payments permitted by clause (b)(iv) will be of this Section) declared or made after the fair market value on Issue Date (including the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in ) does not exceed the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.sum of:
Appears in 2 contracts
Sources: Indenture (Amc Entertainment Inc), Indenture (Marquee Holdings Inc.)
Limitation on Restricted Payments. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:.
(1b) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) Notwithstanding the Company wouldforegoing, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test provisions set forth in the first immediately preceding paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will do not prohibit:
(1i) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery giving of any irrevocable a redemption notice of redemption, as the case may be, if the dividend, distribution dividend or redemption payment would have been permitted on the date of declaration or the date giving of the notice of redemption, as the case may be, would have complied with the provisions of the Indenturenotice;
(2ii) the redemptionany Restricted Payments, repurchase, retirement, defeasance or other acquisition either (A) solely in exchange for shares of any subordinated Indebtedness Qualified Capital Stock of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the CompanyB) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount , through the application of all Restricted Payments net cash proceeds of a substantially concurrent Equity Offering (other than cashto a subsidiary of the Company) or capital contribution received by the Company;
(iii) the acquisition or repayment of any Indebtedness of the Company that is subordinate or junior in right of payment to the Loans or Disqualified Capital Stock of the Company either (A) solely in exchange for shares of Qualified Capital Stock of the Company, or (B) if no Default or Event of Default shall have occurred and be continuing, through the application of net cash proceeds of (1) a substantially concurrent Equity Offering or (2) incurrence for cash of Refinancing Indebtedness (in the case of (1) or (2), other than to a subsidiary of the Company);
(iv) beginning on the fifth anniversary of the date on which the 2015 Notes were issued, so long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, repurchases by the Company of, or dividends to Parent to permit repurchases by Parent of, Common Stock of the Company or Parent from employees, former employees, directors or former directors of the Company or any of its subsidiaries (or permitted transferees of such persons) or their authorized representatives upon the death, disability or termination of employment of such employees or directors, in an aggregate amount for all periods not to exceed 2.0% of the Capital Stock of the Company from time to time at fair market value at the date of such repurchase;
(v) payments to Parent for legal, audit, tax and other expenses directly relating to the administration of Parent, including customary compensation payable to the Parent’s directors and employees, not to exceed €1.5 million in any fiscal year;
(vi) so long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, ongoing service and management fees pursuant to the Management Agreement in an aggregate annual amount not to exceed (x) in respect of any fiscal year in which the Consolidated EBITDA (as defined in the Senior Secured Credit Facilities) of the Company is less than $6.0 billion (the “EBITDA Threshold”), $25.0 million and (y) in respect of any fiscal year in which the Consolidated EBITDA (as defined in the Senior Secured Credit Facilities) of the Company is greater than the EBITDA Threshold, $30.0 million;
(vii) cash payments in lieu of issuing fractional shares pursuant to the exercise or conversion of any exercisable or convertible securities;
(viii) payments or distributions to dissenting shareholders pursuant to applicable law in connection with or in contemplation of the Acquisition or any merger, consolidation or transfer of assets that complies with Section 5.19;
(ix) payments of dividends on Disqualified Capital Stock issued in accordance with Section 5.08;
(x) directors’ fees (including non-executive directors of the Company) or, if the Company is a partnership, directors’ fees of the general partner of the Company in an amount not to exceed $1.5 million per year;
(xi) so long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of the 2015 Notes upon a Change of Control or an Asset Sale to the extent required by the indenture relating to the 2015 Notes, but only if Borrower (A) in the case of a Change of Control prior to the Initial Maturity Date, has first prepaid all Loans and Loan Notes in accordance with Section 5.10(a) hereof, (B) in the case of a Change of Control on or after the Initial Maturity Date, has first purchased each Loan of each Lender that elects to have such Loan purchased in accordance with Section 5.10(b) hereof, or (C) or in the case of an Asset Sale, has first purchased all Loans in accordance with Section 5.11(d) hereof;
(xii) any Restricted Payment made to consummate the Acquisition and the fees and expenses related thereto; provided, however, that such Restricted Payments will be excluded in the calculation of the amount of Restricted Payments;
(xiii) after the Extension Date, so long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, (i) prior to Listing, Restricted Payments by the Company in an amount not to exceed $50 million per annum and $200 million in the aggregate, and (ii) following Listing, the payment of dividends on the listed Common Stock at a rate not to exceed 6% per annum of the net cash proceeds received by the Company in connection with such Listing or any subsequent Listing; provided that if such Listing was of the share capital of a Holding Company of the Company, the net proceeds of any such dividend are used to fund a corresponding dividend in equal or greater amount on the share capital of such Holding Company;
(xiv) dividends or other distributions on Disqualified Capital Stock issued by the Company to the extent such Disqualified Capital Stock constitutes Indebtedness under the indenture and was issued in compliance therewith; provided that prior to the Extension Date, no Restricted Payments may be made pursuant to this Section 5.01(b)(xiv) unless no Default or Event of Default shall have occurred or be continuing;
(xv) distributions by any Restricted Subsidiary of the Company of chemicals to a holder of Capital Stock of such Restricted Subsidiary if such distributions are made pursuant to a provision in a joint venture agreement or other arrangement entered into in connection with the establishment of such Restricted Subsidiary that requires such holder to pay a price for such chemicals equal to that which would be paid in a comparable transaction negotiated on an arms’-length basis (or pursuant to a provision that imposes a substantially equivalent requirement); and
(xvi) after the Extension Date, payments under the Tax Sharing Agreement.
(c) In addition to the foregoing, the Company may make Restricted Investments and, after the Extension Date, the Company may make Restricted Payments if at the time of such Restricted Payment or immediately after giving effect thereto:
(i) no Default or an Event of Default shall have occurred and be continuing or would be caused thereby;
(ii) the Company is able to incur at least $1.00 of additional Indebtedness other than Permitted Indebtedness in compliance with Section 5.08;
(iii) the aggregate amount of Restricted Payments made after the Closing Date, including the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, determined reasonably and in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, good faith by the Board of Directors of the Company of non-cash amounts constituting Restricted Payments, shall not exceed the sum of:
(A) 50% of the cumulative Consolidated Net Income (or if cumulative Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company earned from the end of the quarter immediately preceding the Closing Date through the last day of the last full fiscal quarter for which financial statements are reported immediately preceding the date the Restricted Payment occurs (the “Reference Date”) (treating such period as a single accounting period); provided, however, that for purposes of this sub-clause (iii)(A) only, to the extent any amounts that would constitute net income but which have been used to make a Permitted Investment described in clause (e) of the definition thereof, such amounts shall be excluded from Consolidated Net Income; plus
(B) 100% of the aggregate net cash proceeds or the fair market value, as determined in good faith by the Company, whose determination of property other than cash (including Capital Stock) of Persons engaged in a Permitted Business or property used or useful in a Permitted Business received by the Company or its Restricted Subsidiaries from any Person (other than a subsidiary of the Company) from the issuance and sale subsequent to the Closing Date and on or prior to the Reference Date of Qualified Capital Stock of the Company (including Disqualified Capital Stock of the Company that is converted into or exchanged for Qualified Capital Stock of the Company subsequent to the Closing Date) or debt securities of the Company or its Restricted Subsidiaries that are convertible into or exchangeable for Qualified Capital Stock of the Company, but only when and to the extent such debt securities are converted into or exchanged for Qualified Capital Stock of the Company; plus
(C) without duplication of any amounts included in clause (B) above, 100% of the aggregate net cash proceeds of any equity contribution received by the Company; plus
(D) without duplication of any amounts included in clause (B) above, 100% of the aggregate net cash proceeds of any sales or distributions of the type described in clause (e)(i) or (ii) of the definition of “Permitted Investments” but only to the extent such net cash proceeds are not utilized in accordance therewith (including Disqualified Capital Stock of the Company that is converted into or exchanged for Qualified Capital Stock of the Company subsequent to the Closing Date). In determining the aggregate amount of Restricted Payments made subsequent to the Closing Date in accordance with clause (iii) of the immediately preceding paragraph, cash amounts expended pursuant to clauses (i), (ii)(B), (iii)(B)(1), (iv) and (xiii) of paragraph (b) above shall be evidenced by a Board Resolution. included in such calculation.
(d) Not later than the date of making any Restricted Payment pursuant to paragraph (excluding any Restricted Payment described in the preceding c) or clause (2b)(xi), (3), (4), (6), (7) or (8)) the Company will shall deliver to the Trustee Administrative Agent an Officersofficers’ Certificate certificate stating that such Restricted Payment is permitted complies with this Agreement and setting forth in reasonable detail the basis upon which the required calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in which calculations may be based upon the event that a Restricted Payment meets Company’s quarterly financial statements last provided to the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made Lenders pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Article 6.
Appears in 2 contracts
Sources: Bridge Loan Agreement (Lyondell Chemical Co), Bridge Loan Agreement (Lyondell Chemical Co)
Limitation on Restricted Payments. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which involving the Company or any of its Restricted Subsidiaries is a partySubsidiaries) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company and other than dividends or distributions payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which involving the Company is a partyCompany) any Equity Interests of the Company or any of its direct or indirect parent of the Companyparents;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Subordinated Indebtedness that is subordinated to of the Notes Company or any Subsidiary Guarantor (excluding any intercompany Indebtedness between or among the Subsidiary Guarantees prior to Company and any scheduled repayment or scheduled maturityof its Restricted Subsidiaries), except a payment, purchase, redemption, defeasance payment of interest or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or at the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment Investment, (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1A) no Default or Event of Default has shall have occurred and is be continuing or would occur as a consequence of such Restricted Paymentthereof;
(2B) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur Incur at least $US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.094.09(a) hereof; and
(3C) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 since the Measurement Date (excluding Restricted Payments permitted by clauses (2) through (12) of Section 4.07(b), (3), (4), (6), (7) and (8) of the next succeeding paragraph)pursuant to this Indenture, is less than the sum, without duplication, sum of:
(ai) 5075% of the Consolidated Net Income EBITDA of the Company less 2.00 times Fixed Charges for the period (taken as one accounting period) from April January 1, 2004 2019 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income EBITDA for such period is a deficit, less minus 100% of such deficit), ; plus
(bii) 100% of the aggregate net cash proceeds received by the Company (including since the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 Measurement Date as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) of the Company (in each case, other than in connection with any Excluded Contribution) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), ; plus
(ciii) to the extent that any Restricted Investment that was made after May 11, 2004 the Measurement Date (x) is reduced as a result of payments of dividends to the Company or a Restricted Subsidiary of the Company or (y) is sold for cash or otherwise liquidated or repaid for cash, (in the case of sub-clauses (x) and (y)) the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment or (z) is reduced upon the release of a Note Guarantee granted by the Company or a Restricted Subsidiary of the Company that constituted a Restricted Investment, to the extent that the initial granting of such Note Guarantee reduced the restricted payments capacity under Section 4.07(a)(4)(C); plus
(div) to the extent that any Unrestricted Subsidiary of the Company designated as such after the Measurement Date is redesignated re-designated as a Restricted Subsidiary after May 11, 2004the Measurement Date, the lesser of (i) the fair market value Fair Market Value of the Company’s Restricted Investment in such Subsidiary as of the date of such redesignation re-designation or (ii) such fair market value as the Fair Market Value of the net aggregate Investments made by the Company or a Restricted Subsidiary of the Company in such Unrestricted Subsidiary from the date on which such Subsidiary entity was originally designated as an Unrestricted Subsidiary. Subsidiary through the date of such re-designation; plus
(v) 100% of the aggregate amount received from the sale of the stock of any Unrestricted Subsidiary of the Company after the Measurement Date or 100% of any dividends received by the Company or a Restricted Subsidiary of the Company after the Measurement Date from an Unrestricted Subsidiary of the Company.
(b) The preceding provisions of Section 4.07(a) hereof will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such the dividend or giving of the delivery of any irrevocable notice of redemptionredemption notice, as the case may be, if the dividend, distribution or redemption payment on at the date of declaration or notice, the date of the notice of redemption, as the case may be, dividend or redemption payment would have complied with the provisions of the this Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition making of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company Restricted Payment in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed ) or from the substantially concurrent if such redemptioncontribution of common equity capital to the Company (in each case, repurchase, retirement, defeasance or acquisition occurs not more other than 120 days after such salein connection with any Excluded Contribution); provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition Restricted Payment will be excluded from clause (3)(bSection 4.07(a)(4)(C)(ii) of the preceding paragraphhereof;
(3) the defeasancerepurchase, redemption, repurchase, retirement defeasance or other acquisition or retirement for value of subordinated Subordinated Indebtedness of the Company or any Subsidiary Guarantor with the net cash proceeds from an incurrence of, or in exchange for, a substantially concurrent Incurrence of Permitted Refinancing Indebtedness;
(4) the payment of any dividend (or, in the case of any partnership or distribution limited liability company, any similar distribution) by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, director or employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or planagreement, stock option agreement, shareholders’ agreement or similar agreement or planagreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 US$1.0 million in any twelve-month period;
(6) the acquisition repurchase of Equity Interests deemed to occur upon the exercise of stock options to the extent such Equity Interests represent a portion of the exercise price of those stock options;
(7) the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Stock of the Company or any Restricted Subsidiary of the Company issued on or after the Issue Date in accordance with the Fixed Charge Coverage Ratio test described in Section 4.09(a) hereof;
(8) any Restricted Payment made or deemed to be made by the Company or a Restricted Subsidiary of the Company under, pursuant to or in connection with the Services and Right to Use Agreement, the Reinvestment Agreement or the MSA;
(9) [RESERVED];
(10) Restricted Payments that are made with Excluded Contributions;
(11) payments to any parent entity in respect of directors’ fees, remuneration and expenses (including director and officer insurance (including premiums therefore)) to the extent relating to the Company and its Subsidiaries, in an aggregate amount not to exceed US$2.0 million per annum;
(12) the making of Restricted Payments, if applicable:
(A) in amounts required for any direct or indirect parent of the Company to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of the Company and general corporate operating and overhead expenses of any direct or indirect parent of the Company in each case to the extent such fees and expenses are attributable to the ownership or operation of the Company, if applicable, and its Subsidiaries, in an aggregate amount not to exceed US$2.0 million per annum;
(B) in amounts required for any direct or indirect parent of the Company, if applicable, to pay interest and/or principal on Indebtedness the proceeds of which have been contributed to the Company or any of its Restricted Subsidiaries prior to the Issue Date and that has been guaranteed by, or is otherwise considered Indebtedness of, the Company Incurred in accordance with Section 4.09; provided that the amount of any such proceeds will be excluded from Section 4.07(a)(4)(C)(ii);
(C) in amounts required for any direct or indirect parent of the Company to pay fees and expenses, other than to Affiliates of the Company, related to any unsuccessful equity or debt offering of such parent; and
(D) payments for services under any Revenue Sharing Agreement that would constitute or be deemed to constitute a Restricted Payment;
(13) any Restricted Payment used to fund the Transactions and the payment of fees and expenses incurred in connection with the Transactions or owed by the Company or any direct or indirect parent of the Company or its Restricted Subsidiaries to Affiliates, and any other payments made, including any such payments made to any direct or indirect parent of the Company to enable it to make payments, in connection with the consummation of the Transactions, whether payable on the Issue Date or thereafter, in each case on terms described in the Offering Memorandum under “Use of Proceeds” and to the extent permitted by Section 4.11;
(14) any Restricted Payments, to the extent required to be made by any Gaming Authority having jurisdiction over the Company or any of its Restricted Subsidiaries or Melco Resorts Macau (or any other operator of the Studio City Casino);
(15) cash payments in lieu of the issuance of fractional shares in connection with the exercise of stock warrants, options or stock appreciation rights by way other securities convertible into or exchangeable for Capital Stock of cashless exercisethe Company or any Restricted Subsidiary; provided, however, that any such cash payment shall not be for the purpose of evading the limitation of this Section 4.07;
(716) the purchase, repurchase, redemption, defeasance redemption or other acquisition or retirement for value of subordinated any Subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% Guarantor pursuant to provisions similar to those described under Section 4.15, provided that all Notes tendered by holders of the principal amount thereof (plus accrued and unpaid interest) Notes in the event of connection with a Change of Control in accordance with provisions similar Offer have been repurchased, redeemed or acquired for value;
(17) payments or distributions to Section 4.15 or (b) at a purchase price not greater than 100.0% dissenting stockholders of Capital Stock of the principal amount thereof (plus accrued Company pursuant to applicable law in connection with a consolidation, merger or transfer of all or substantially all of the assets of the Company and unpaid interest) in accordance its Restricted Subsidiaries, taken as a whole, that complies with provisions similar to Section 4.105.01; provided thatthat as a result of such consolidation, prior to merger or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirementtransfer of assets, the Company has shall have made the a Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes (if required by this Indenture) and has completed the repurchase or redemption of that all Notes validly tendered for payment by holders in connection with such Change of Control Offer have been repurchased, redeemed or Asset Sale Offer;acquired for value; and
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(918) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; US$15.0 million since the Issue Date, provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause clauses (912), (13) and (18) of this Section 4.07(b), no Default or Event of Default shall have occurred and be continuing or would be caused therebyoccur as a consequence thereof. The amount of all Restricted Payments (other than cash) will be the fair market value Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value Fair Market Value of any assets or securities that are required to be valued by this covenant Section 4.07 will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, determined by the Board of Directors of the Company, Company whose determination shall resolution with respect thereto will be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver delivered to the Trustee as set forth in an Officers’ Officer’s Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories Company. The Company’s Board of Restricted Payments described in Directors’ determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of international standing (an “Independent Financial Advisor”) if the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Fair Market Value exceeds US$45.0 million.
Appears in 2 contracts
Sources: Indenture (Melco Resorts & Entertainment LTD), Indenture (Melco Resorts & Entertainment LTD)
Limitation on Restricted Payments. The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
, (1a) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary Qualified Capital Stock of the Company);
) on or in respect of shares of the Company's Capital Stock to holders of such Capital Stock, (2b) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct warrants, rights or indirect parent op- tions to purchase or acquire shares of the Company;
(3) make any principal payment on or with respect toclass of such Capital Stock, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4c) make any Restricted Investment (all such payments and other each of the foregoing actions set forth in these clauses (1a), (b) through and (4c) above being collectively referred to as “a "Restricted Payments”Payment"), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, if at the time of such Restricted Payment and or immediately after giving pro forma effect thereto as if such Restricted Payment had been made at thereto, (i) a Default or an Event of Default shall have occurred and be continuing, (ii) the beginning of the applicable four-quarter period, have been permitted Company is not able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth (other than Permitted Indebtedness) in the first paragraph of compliance with Section 4.09; and
4.12, or (3iii) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by subsequent to the Company and its Restricted Subsidiaries after May 11, 2004 Issue Date shall exceed the sum of: (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(aw) 50% of the cumulative Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, or if such cumulative Consolidated Net Income for such period is shall be a deficitloss, less minus 100% of such deficitloss) of the Company earned subsequent to the Issue Date and on or prior to the date the Restricted Payment occurs (the "Reference Date") (treating such period as a single accounting period), plus
; plus (bx) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of property other than cash) from any Additional Assets to the extent acquired in consideration of Equity Interests of the Company Person (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) from the issuance and sale subsequent to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash Issue Date and on or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) prior to the extent that any Unrestricted Subsidiary Reference Date of Qualified Capital Stock of the Company is redesignated as a Restricted Subsidiary after May 11(including Capital Stock issued upon the conversion of convertible Indebtedness or in exchange for outstanding Indebtedness); plus (y) without duplication of any amounts included in clause (iii)(x) above, 2004, 100% of the lesser of aggregate net proceeds (i) including the fair market value of property other than cash) of any equity contribution received by the Company from a holder of the Company’s Investment 's Capital Stock (excluding any net proceeds from an Equity Offering to the extent used to redeem Notes in such Subsidiary as accordance with the optional redemption provisions of the date Notes) plus (z) 100% of such redesignation the aggregate net proceeds (including the fair market value of property other than cash) of any (i) sale or other disposition of Restricted Investments made by the Company and its Restricted Subsidiaries or (ii) such fair market value as dividend from, or the sale of the date on which such Subsidiary was originally designated as stock of, an Unrestricted Subsidiary. The Notwithstanding the foregoing, the provisions set forth in the immediately preceding provisions will paragraph do not prohibit:
: (1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, such redemption if the dividend, distribution dividend or redemption payment on the date of declaration or the date of the notice of redemptionredemption price, as the case may be, would have complied with been permitted on the provisions date of the Indenture;
declaration or notice; (2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be as a consequence thereof, the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value acquisition of any assets or securities that are required to be valued by this covenant will be determined, in the case shares of amounts under $50.0 million, by an officer Capital Stock of the Company and(the "Retired Capital Stock"), either (i) solely in the case exchange for shares of amounts of $50.0 million or more, by the Board of Directors Qualified Capital Stock of the Company, whose determination shall be evidenced by a Board Resolution. Not later than Company (the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2"Refunding Capital Stock"), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.or
Appears in 2 contracts
Sources: Indenture (Therma Wave Inc), Indenture (Therma Wave Inc)
Limitation on Restricted Payments. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary Qualified Capital Stock of the Company)) on or in respect of shares of the Company’s Capital Stock to holders of such Capital Stock;
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct warrants, rights or indirect parent options to purchase or acquire shares of any class of such Capital Stock (other than in exchange for Qualified Capital Stock of the Company);
(3) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled final maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchase, redemption, defeasance any Indebtedness (other than Indebtedness owed by the Company or other acquisition any Restricted Subsidiary of any such Indebtedness in anticipation the Company to another Restricted Subsidiary of satisfying a sinking fund obligation, principal installment the Company or the Stated Maturity thereof, in each case, due within one year Company) of the date Company or any Restricted Subsidiary that is subordinate or junior in right of such payment, purchase, redemption, defeasance or other acquisitionpayment to the Notes; or
(4) make any Restricted Investment if at the time of such action (all each such payments and other actions set forth in these clauses (1) through (4) above of this Section 4.07(a) being collectively referred to as as, a “Restricted PaymentsPayment”), unless, at the time of and ) or immediately after giving effect to such Restricted Payment:thereto,
(1i) no a Default or an Event of Default has shall have occurred and is continuing or would occur as a consequence of such Restricted Payment;be continuing; or
(2ii) immediately after giving effect thereto on a pro forma basis, the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted is not able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and4.09(b), or
(3iii) such Restricted Payment, together with the aggregate amount of all other Restricted Payments (including such proposed Restricted Payment) made by subsequent to the Company and its Restricted Subsidiaries after May 11Issue Date (the amount expended for such purposes, 2004 (excluding Restricted Payments permitted by clauses (2)if other than in cash, (3), (4), (6), (7being the Fair Market Value of such property) and (8) of shall exceed the next succeeding paragraph), is less than the sum, without duplication, sum of:
(a) 5050.0% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 the beginning of the fiscal quarter in which the 2010 Issue Date occurred to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100100.0% of such deficit), ; plus
(b) 100100.0% of the aggregate net cash proceeds and the Fair Market Value of marketable securities or other property received by the Company from any Person since the 2010 Issue Date including:
(including the fair market value of i) any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified StockCapital Stock and Excluded Contributions);
(ii) or from the issue issuance or sale of convertible or exchangeable Disqualified Capital Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Capital Stock or debt securities) sold to a Subsidiary of the Company), ; plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 the Issue Date is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, ; plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated designated as a Restricted Subsidiary of the Company after May 11, 2004the Issue Date, the lesser of (i) the fair market value Fair Market Value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will Subsidiary after the Issue Date.
(b) Section 4.07(a) hereof shall not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, such redemption if the dividend, distribution dividend or redemption payment on the date of declaration or the date of the notice of redemptionredemption price, as the case may be, would have complied with been permitted on the provisions date of the declaration or notice under this Indenture;
(2) the redemptionmaking of any Restricted Payment, either (i) solely in exchange for shares of Qualified Capital Stock of the Company, (ii) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company or (iii) through the application of a substantially concurrent cash capital contribution received by the Company from its shareholders (which capital contribution (to the extent so used) shall be excluded from the calculation of amounts under clause (iii)(b) of Section 4.07(a) hereof);
(3) the purchase, repurchase, retirementredemption, defeasance or other acquisition or retirement for value of any subordinated Indebtedness of the Company or any Guarantor or Restricted Subsidiary (including the acquisition of any Equity Interests shares of Disqualified Capital Stock of the Company in Company) that is unsecured or contractually subordinated to the Notes or to any Note Guarantee by exchange for, or out of the net cash proceeds from a substantially concurrent incurrence of Refinancing Indebtedness; provided, however, that such purchase, repurchase, redemption, defeasance or other acquisition or retirement for value shall be excluded in the calculation of the substantially concurrent sale amount of Restricted Payments;
(4) so long as no Default or Event of Default shall have occurred and be continuing, the repurchase, retirement or other than acquisition or retirement for value by the Company of Common Stock (or options, warrants or other rights to a Subsidiary of the Companyacquire Common Stock) of, Equity Interests of the Company (or payments to any direct or indirect parent company of the Company to permit distributions to repurchase common equity (or options, warrants or other than Disqualified Stock)rights to acquire common equity) thereof) of such direct or indirect parent company) from any future, with a sale being deemed substantially concurrent if current or former officer, director, manager or employee (or any spouses, successors, executors, administrators, heirs or legatees of any of the foregoing) of the Company, any direct or indirect parent company of the Company, or any of its Subsidiaries or their authorized representatives, in an aggregate amount not to exceed $10.0 million in any calendar year plus (i) the aggregate net cash proceeds received by the Company after the Issue Date from the issuance of such redemptionEquity Interests to, repurchaseor the exercise of options to purchase such Equity Interests by, retirementany current or former director, defeasance officer or acquisition occurs not more than 120 days after such sale; employee of the Company or any Restricted Subsidiary of the Company (provided that the amount of any such net cash proceeds that are received by the Company and utilized pursuant to this clause (4)(i) for any such repurchase, redemption, repurchase, retirement, defeasance acquisition or other acquisition retirement will be excluded from clause (3)(biii)(b) of the preceding paragraph;
Section 4.07(a) hereof) and (3ii) the defeasanceproceeds of “key-man” life insurance policies that are used to make such redemptions or repurchases; provided that amounts available pursuant to this clause (4) to be utilized for Restricted Payments during any twelve-month period may be carried forward and utilized in the next succeeding twelve-month period and provided, redemptionfurther, repurchasethat the cancellation of Indebtedness owing to the Company from any future, retirement current or other acquisition former officer, director, manager or employee (or any spouses, successors, executors, administrators, heirs or legatees of subordinated Indebtedness any of the foregoing) of the Company or any Guarantor of its Restricted Subsidiaries in connection with the net cash proceeds from an incurrence of, any repurchase of Capital Stock of such entities (or in exchange for, Permitted Refinancing Indebtednesswarrants or options or rights to acquire such Capital Stock) will not be deemed to constitute a Restricted Payment under this Indenture;
(4a) the repurchase of Equity Interests deemed to occur upon the exercise of stock options or warrants to the extent such Equity Interests represent a portion of the exercise price of those stock options or warrants and (b) repurchases of Equity Interests or options to purchase Equity Interests deemed to occur in connection with the exercise of stock options to the extent necessary to pay applicable withholding taxes;
(6) the declaration and payment of dividends or making of distributions by the Company to, or the making of loans to, its direct parent company in amounts required for the Company’s direct or indirect parent entities (including a corporation organized to hold interests in the Company in connection with the public issuance of shares) to pay, without duplication as to amounts of:
(a) franchise taxes and other fees, taxes and expenses required to maintain the corporate existence of the Company and its direct and indirect parent entities plus $500,000 per year;
(b) federal, state, and local income taxes of the direct or indirect parent entity, or of or on a consolidated or combined tax group of which the direct or indirect parent is the common parent, in each case to the extent such income taxes are attributable to the income of the Company and its Restricted Subsidiaries and not directly payable by the Company or its Restricted Subsidiaries and, to the extent of the amount actually received from any of the Company’s Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent attributable to the income of such Unrestricted Subsidiaries of the Company; provided that (i) in determining such taxes, the effect thereon of any net operating loss carryforwards or other carryforwards or tax attributes, such as alternative minimum tax carryforwards, shall be taken into account, (ii) if there is an adjustment in the amount of Taxable Income for any periods, an appropriate positive or negative adjustment shall be made to the amount of distributions or loans permitted pursuant to this clause 6(b), and if the adjustment is negative, then the permitted distribution on loan for succeeding periods shall be reduced (without duplication of reductions due to clause 6(b)(i) hereof and with appropriate adjustments for any contributions to the Company in respect of such negative adjustment to Taxable Income) to take into account such negative amount until such negative amount is reduced to zero, (iii) any distribution or loan in respect of such taxes other than amounts relating to estimated payments shall be computed by a nationally recognized accounting firm and (iv) in no event will such dividends and loans exceed the amounts that the Company and its Restricted Subsidiaries and/or Unrestricted Subsidiaries (as applicable) would have paid as a stand-alone group;
(c) customary salary, bonus and other benefits payable to officers and employees of any direct or indirect parent of the Company to the extent such salaries, bonuses and other benefits are attributable to the ownership or operations of the Company and its Restricted Subsidiaries; and
(d) general corporate overhead expenses and other expenses incidental to being a public company (including, without limitation, audit, listing and legal expense) of any direct or indirect parent company of the Company to the extent such expenses are attributable to the ownership or operation of the Company and its Restricted Subsidiaries;
(7) so long as no Default or Event of Default shall have occurred and be continuing, the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Capital Stock of the Company or any Restricted Subsidiary of the Company issued on or after the Issue Date in accordance with Section 4.09(b) hereof;
(8) the payment of any dividend (or, in the case of any partnership or distribution limited liability company, any similar distribution) by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(59) any repricing or issuance of employee stock options or the repurchaseadoption of bonus arrangements, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company each case in connection with the exercise issuance of stock options or stock appreciation rights by way of cashless exercisethe Notes, and payments pursuant to such arrangements;
(710) Restricted Payments that are made with Excluded Contributions;
(11) Restricted Payments made with Net Cash Proceeds from Asset Sales remaining after application thereof as required by Section 4.10 hereof (including after the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value making by the Issuers of subordinated Indebtedness any Asset Sale Offer required to be made by the Issuers pursuant to such covenant and the purchase of the Company or any Restricted Subsidiary all Notes tendered therein);
(a12) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event upon occurrence of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% and within 60 days after the completion of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer pursuant to Section 4.14 hereof (including the purchase of all Notes tendered), any purchase or Asset Sale Offer, as applicable, as provided redemption of Obligations of the Company that are subordinate or junior in such covenants with respect right of payment to the Notes and has completed required pursuant to the repurchase or redemption terms thereof as a result of all Notes validly tendered for payment in connection with such Change of Control Offer at a purchase or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 redemption price not to exceed $25.0 million101.0% of the outstanding principal amount thereof, plus accrued and unpaid interest thereon, if any; provided, however, that (A) at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9)of such purchase or redemption, no Default or Event of Default shall have occurred and be continuing (or would be caused thereby. The amount result therefrom) and (B) such purchase or redemption is not made, directly or indirectly, from the proceeds of all Restricted Payments (other than cashor made in anticipation of) will be the fair market value on the date any issuance of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued Indebtedness by the Company or any Restricted Subsidiary of the Company;
(13) Restricted Payments in an amount not to exceed $100.0 million;
(14) the payment of dividends on the Company’s Common Stock (or the payment of dividends to any direct or indirect parent of the Company to fund the payment of dividends on its Common Stock) after the Issue Date, of up to 6.0% per annum of the net proceeds received by or contributed to the Company (or any direct or indirect parent of the Company and contributed to the Company) since the 2010 Issue Date in any public equity offering, other than public equity offerings registered on Form S-8 and other than any public sale constituting an Excluded Contribution, provided, however, that the amount of any such net proceeds that is utilized for any such Restricted Subsidiary, as Payment shall be excluded from the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case calculation of amounts under $50.0 millionclause (iii)(b) of Section 4.07(a) hereof; and
(15) any transfer, by an officer dividend or other distribution of the Company and, in the case of amounts of $50.0 million Parent Stock or more, by the Board of Directors any proceeds from a transfer thereof to a direct or indirect parent entity of the Company, whose determination shall be evidenced by a Board Resolution. Not later than In determining the date aggregate amount of making any Restricted Payment (excluding any Restricted Payment described Payments made subsequent to the Issue Date in the preceding accordance with clause (2)iii) of Section 4.07(a) hereof, amounts expended pursuant to clauses (31), (4), (6), (7) or and (8)13) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will 4.07(b) shall be permitted to divide or classify (or later divided or classify or reclassify included in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07calculation.
Appears in 2 contracts
Sources: Indenture (Nationstar Sub1 LLC), Indenture (Nationstar Sub2 LLC)
Limitation on Restricted Payments. The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) Qualified Capital Stock of the Company or and dividends and distributions payable to the Company or a another Restricted Subsidiary of the Company)) on or in respect of shares of Capital Stock of the Company or its Restricted Subsidiaries to holders of such Capital Stock;
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct Restricted Subsidiary, other than any such Capital Stock held by the Company or indirect parent of the Companyany Restricted Subsidiary;
(3) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value value, prior to any scheduled final maturity, scheduled repayment or scheduled sinking fund payment, any Indebtedness of the Company or any Guarantor that is subordinated subordinate or junior in right of payment to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionGuarantee; or
(4) make any Restricted Investment (all such payments and other than Permitted Investments); (each of the foregoing actions set forth in these clauses (1), (2), (3) through and (4) above being collectively referred to as a “Restricted PaymentsPayment”), unless, if at the time of and such Restricted Payment or immediately after giving effect thereto:
(i) a Default or an Event of Default shall have occurred and be continuing;
(ii) the Company is not able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.11 or
(iii) the aggregate amount of Restricted Payments (including such proposed Restricted Payment) made subsequent to the Issue Date (the amount expended for such purposes, if other than in cash, being the Fair Market Value of such property at the time of the making thereof) shall exceed the sum of:
(A) 50% of the aggregate amount of the Consolidated Adjusted Cash Flow of the Company accrued on a cumulative basis during the period (taken as one accounting period) beginning on the first day of the Company’s fiscal quarter during which the Issue Date occurs and ending on the last day of the last full fiscal quarter preceding the Transaction Date; plus
(B) 100% of the aggregate net cash proceeds received by the Company from any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to the Issue Date of Qualified Capital Stock of the Company (excluding any net proceeds from an Equity Offering to the extent used to redeem Notes pursuant to the provisions described in Section 5(b) of the Notes); plus
(C) without duplication of any amounts included in clause (iii)(B) above, 100% of the aggregate net cash proceeds of any equity contribution received by the Company from a holder of the Company’s Capital Stock subsequent to the Issue Date (excluding any net proceeds from an Equity Offering to the extent used to redeem Notes pursuant to the provisions described in Section 5(b) of the Notes); plus
(D) 100% of the aggregate net cash proceeds received from the issuance of Indebtedness or shares of Disqualified Capital Stock of the Company that have been converted into or exchanged for Qualified Capital Stock of the Company subsequent to the Issue Date; plus
(E) an amount equal to the sum of (i) the net reduction in the Investments (other than Permitted Investments) made by the Company or any Restricted Subsidiary in any Person resulting from repurchases, repayments or redemptions of such Investments by such Person, proceeds realized on the sale of such Investment and proceeds representing the return of capital (excluding dividends and distributions), in each case received by the Company or any Restricted Subsidiary, and (ii) to the extent such Person is an Unrestricted Subsidiary, the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Unrestricted Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary; provided, however, that the foregoing sum shall not exceed, in the case of any such Person or Unrestricted Subsidiary, the amount of Investments (excluding Permitted Investments) previously made (and treated as a Restricted Payment) by the Company or any Restricted Subsidiary in such Person or Unrestricted Subsidiary. In the case of clauses (iii)(B) and (C) above, any net cash proceeds from issuances and sales of Qualified Capital Stock of the Company financed directly or indirectly using funds borrowed from the Company or any Subsidiary of the Company, shall be excluded until and to the extent such borrowing is repaid. Notwithstanding the foregoing, the provisions set forth in the immediately preceding paragraph do not prohibit:
(1) the payment of any dividend or other distribution or redemption within 60 days after the date of declaration of such dividend or call for redemption if such payment would have been permitted on the date of declaration or call for redemption;
(2) the acquisition of any shares of Qualified Capital Stock of the Company, either (i) solely in exchange for other shares of Qualified Capital Stock of the Company or (ii) through the application of net proceeds of a sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company within 60 days after such sale;
(3) the acquisition of any Indebtedness of the Company or the Guarantors that is subordinate or junior in right of payment to the Notes and Guarantees either (i) solely in exchange for shares of Qualified Capital Stock of the Company, or (ii) through the application of net proceeds of (a) a sale for cash (other than to a Subsidiary of the Company) within 60 days after such sale of shares of Qualified Capital Stock of the Company or (b) if no Default or Event of Default would exist after giving effect thereto, Refinancing Indebtedness;
(4) an Investment either (i) solely in exchange for shares of Qualified Capital Stock of the Company or (ii) through the application of the net proceeds of a sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company within 60 days after such sale;
(5) if no Default or Event of Default has occurred and is continuing or would occur as a consequence exist after giving effect thereto, the repurchase or other acquisition of shares of Capital Stock of the Company from employees, former employees, directors or former directors of the Company (or permitted transferees of such Restricted Payment;
(2) the Company wouldemployees, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter periodformer employees, have been permitted to incur at least $1.00 of additional Indebtedness directors or former directors), pursuant to the Fixed Charge Coverage Ratio test set forth in terms of the first paragraph agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Section 4.09Directors of the Company under which such shares were granted, issued or sold; and
(3) such Restricted Paymentprovided, together with however, that the aggregate amount of all such repurchases and other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of acquisitions in any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may calendar year shall not exceed $2.0 million 250,000 plus any such amounts not used in any twelve-month periodprior fiscal years;
(6) in the acquisition event of Equity Interests by a Change of Control, and if no Default shall have occurred and be continuing or would exist after giving effect, the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the payment, purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Indebtedness that is subordinated Indebtedness of to the Company Notes or any Restricted Subsidiary (a) the Guarantees, in each case, at a purchase price not greater than 101.0101% of the principal amount thereof of such Indebtedness (or, if such Indebtedness was issued with original issue discount, 101% of the accreted value), plus any accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10interest thereon; provided thatprovided, however, that prior to or simultaneously substantially concurrently with such payment, purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the a Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes as a result of such Change of Control and has completed the repurchase or redemption of repurchased all Notes validly tendered for payment and not withdrawn in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares 7) repurchases of Capital Stock deemed to occur upon exercise of stock options, warrants or other similar rights if such Capital Stock represents a portion of the exercise price of such options, warrants or other similar rights;
(8) payments or distributions to dissenting stockholders of Capital Stock of the Company pursuant to applicable law, pursuant to or in connection with a consolidation, merger or transfer of assets that complies with the provisions of this Indenture applicable to mergers, consolidations and transfers of all or substantially all of the property and assets of the Company or any transaction otherwise permitted under this Section 4.07of its Restricted Subsidiaries; orand
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), if no Default or Event of Default shall have occurred and be continuing or would be caused therebyexist after giving effect thereto, other Restricted Payments not to exceed $10,000,000 in the aggregate after the Issue Date. The In determining the aggregate amount of all Restricted Payments made subsequent to the Issue Date in accordance with clause (other than cashiii) will be the fair market value on the date of the Restricted Payment first paragraph of this Section 4.09, amounts expended pursuant to clauses (1), (2)(ii), (3)(ii)(a) and (4)(ii) of the asset(s) or securities proposed to immediately preceding paragraph shall be transferred or issued by the Company or included in such Restricted Subsidiary, as the case may be, calculation and amounts expended pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer other clause of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination immediately preceding paragraph shall be evidenced by a Board Resolutionexcluded therefrom. Not later than Promptly following the date end of making each fiscal quarter during which any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2)was made, (3), (4), (6), (7) or (8)) the Company will shall deliver to the Trustee an Officers’ Certificate stating that each such Restricted Payment is permitted complies with this Indenture and setting forth in reasonable detail the basis upon which the required calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in which calculations may be based upon the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Company’s latest available internal quarterly financial statements.
Appears in 2 contracts
Sources: Indenture (McLeodUSA Holdings Inc), Indenture (McLeodusa Inc)
Limitation on Restricted Payments. (a) The Company will not, and will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly:
(1) declare or pay any dividend on, or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitationto holders of, any payment in connection with any merger or consolidation to which shares of Capital Stock of the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Subsidiary (other than dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) shares of Qualified Capital Stock of the Company or payable in options, warrants or other rights to the Company or a Restricted Subsidiary purchase Qualified Capital Stock of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct or indirect parent Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company);
(3) make any principal payment on or with respect to, or purchaserepurchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled repayment principal payment, scheduled sinking fund payment or scheduled maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except a payment, purchase, redemption, defeasance or other acquisition of in any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year case out of the date net cash proceeds of such payment, purchase, redemption, defeasance or other acquisitionPermitted Refinancing Indebtedness; or
(4) make any Restricted Investment Investment; (all such payments and or other actions set forth described in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, unless at the time of and after giving effect to such Restricted Payment:
(1I) no Default or Event of Default has shall have occurred and is continuing or would occur as a consequence of such Restricted Paymentbe continuing;
(2II) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least could Incur $1.00 of additional Indebtedness pursuant to in accordance with the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.094.09(a); and
(3III) such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made by after January 1, 2015, shall not exceed the Company and its Restricted Subsidiaries after May 11, 2004 sum (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7without duplication) and (8) of the next succeeding paragraph), is less than the sum, without duplication, offollowing:
(aA) 50% of the Consolidated Net Income of the Company for accrued on a cumulative basis during the period (taken as one accounting period) from April beginning on January 1, 2004 to 2015, and ending on the end last day of the Company’s most recently ended last fiscal quarter for which internal financial statements are available at ending prior to the time date of such proposed Restricted Payment (or, if such Consolidated Net Income for such period is a deficitloss, less minus 100% of such deficitloss), ; plus
(bB) 100% of the aggregate net cash proceeds Net Cash Proceeds, or the Fair Market Value of assets and property other than cash, received after January 1, 2015, by the Company from the issuance or sale (including other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the fair market value Company or any options, warrants or rights to purchase such shares of any Additional Assets to Qualified Capital Stock of the extent acquired in consideration Company; plus
(C) the aggregate Net Cash Proceeds, or the Fair Market Value of Equity Interests of assets and property other than cash, received after January 1, 2015, by the Company (other than Disqualified Stock)from any of its Restricted Subsidiaries) since May 11upon the exercise of any options, 2004 as a contribution warrants or rights to its common equity capital or purchase shares of Qualified Capital Stock of the Company; plus
(D) the aggregate Net Cash Proceeds received after January 1, 2015, by the Company from the issue issuance or sale of Equity Interests of the Company (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Capital Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Qualified Capital Stock or debt securities) sold to a Subsidiary of the Company), together with the aggregate cash received by the Company at the time of such conversion or exchange; plus
(cE) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or not otherwise liquidated or repaid for cashincluded in Consolidated Net Income, the lesser net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of (i) the cash return loans or advances, or other transfers of capital with respect to such Restricted Investment (less the cost of dispositionassets, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) in each case to the extent that Company or a Restricted Subsidiary after January 1, 2015, from any Unrestricted Subsidiary or from the redesignation of the Company is redesignated an Unrestricted Subsidiary as a Restricted Subsidiary after May 11(valued in each case as provided in the definition of “Investment”), 2004, not to exceed in the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment case of any dividend or distribution or Unrestricted Subsidiary the consummation total amount of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale Investments (other than to a Permitted Investments) in such Unrestricted Subsidiary of the Company) of, Equity Interests of made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2015.
(other than Disqualified Stockb) Notwithstanding the preceding provisions, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
), (5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(94.07(b)) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing continuing:
(1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of the preceding paragraph (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of the preceding paragraph);
(2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company;
(3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issuance and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company;
(4) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issuance and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company;
(5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent Incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes;
(6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6);
(7) the repurchase of Equity Interests deemed to occur upon the exercise of stock or other equity options to the extent such Equity Interests represent a portion of the exercise price of those stock or other equity options and any repurchase or other acquisition of Equity Interests is made in lieu of or to satisfy withholding taxes in connection with any exercise or exchange of stock options, warrants, incentives or other rights to acquire Equity Interests; and
(8) other Restricted Payments in an aggregate amount not to exceed $35,000,000.
(c) The actions described in clauses (1), (3), (4) and (6) of Section 4.07(b) shall be Restricted Payments that shall be permitted to be made in accordance with Section 4.07(b) but shall reduce the amount that would otherwise be caused thereby. available for Restricted Payments under Section 4.07(a)(III) (provided that any dividend paid pursuant to clause (1) of Section 4.07(b) shall reduce the amount that would otherwise be available under Section 4.07(a)(III) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5), (7) and (8) of Section 4.07(b) shall be permitted to be taken in accordance with this clause (c) and shall not reduce the amount that would otherwise be available for Restricted Payments under Section 4.07(a)(III).
(d) The amount of all Restricted Payments (other than cash) will be the fair market value Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.
Appears in 2 contracts
Sources: Indenture (Comstock Oil & Gas, LP), Indenture (Comstock Oil & Gas, LP)
Limitation on Restricted Payments. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which involving the Company or any of its Restricted Subsidiaries is a partySubsidiaries) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company and other than dividends or distributions payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which involving the Company is a partyCompany) any Equity Interests of the Company or any of its direct or indirect parent of the Companyparents;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Subordinated Indebtedness that is subordinated to of the Notes Company or any Subsidiary Guarantor (excluding any intercompany Indebtedness between or among the Subsidiary Guarantees prior to Company and any scheduled repayment or scheduled maturityof its Restricted Subsidiaries), except a payment, purchase, redemption, defeasance payment of interest or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or at the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment Investment, (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1A) no Default or Event of Default has shall have occurred and is be continuing or would occur as a consequence of such Restricted Paymentthereof;
(2B) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur Incur at least $US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.094.09(a) hereof; and
(3C) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 since the Measurement Date (excluding Restricted Payments permitted by clauses (2) through (12) of Section 4.07(b), (3), (4), (6), (7) and (8) of the next succeeding paragraph)pursuant to this Indenture, is less than the sum, without duplication, of:
(ai) 5075% of the Consolidated Net Income EBITDA of the Company less 2.00 times Fixed Charges for the period (taken as one accounting period) from April January 1, 2004 2019 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income EBITDA for such period is a deficit, less minus 100% of such deficit), ; plus
(bii) 100% of the aggregate net cash proceeds received by the Company (including since the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 Measurement Date as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) of the Company (in each case, other than in connection with any Excluded Contribution) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), ; plus
(ciii) to the extent that any Restricted Investment that was made after May 11, 2004 the Measurement Date (x) is reduced as a result of payments of dividends to the Company or a Restricted Subsidiary of the Company or (y) is sold for cash or otherwise liquidated or repaid for cash, (in the case of sub-clauses (x) and (y)) the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment or (z) is reduced upon the release of a Note Guarantee granted by the Company or a Restricted Subsidiary of the Company that constituted a Restricted Investment, to the extent that the initial granting of such Note Guarantee reduced the restricted payments capacity under Section 4.07(a)(4)(C); plus
(div) to the extent that any Unrestricted Subsidiary of the Company designated as such after the Measurement Date is redesignated re-designated as a Restricted Subsidiary after May 11, 2004the Measurement Date, the lesser of (i) the fair market value Fair Market Value of the Company’s Restricted Investment in such Subsidiary as of the date of such redesignation re-designation or (ii) such fair market value as the Fair Market Value of the net aggregate Investments made by the Company or a Restricted Subsidiary of the Company in such Unrestricted Subsidiary from the date on which such Subsidiary entity was originally designated as an Unrestricted Subsidiary. Subsidiary through the date of such re-designation; plus
(v) 100% of the aggregate amount received from the sale of the stock of any Unrestricted Subsidiary of the Company after the Measurement Date or 100% of any dividends received by the Company or a Restricted Subsidiary of the Company after the Measurement Date from an Unrestricted Subsidiary of the Company.
(b) The preceding provisions of Section 4.07(a) hereof will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such the dividend or giving of the delivery of any irrevocable notice of redemptionredemption notice, as the case may be, if the dividend, distribution or redemption payment on at the date of declaration or notice, the date of the notice of redemption, as the case may be, dividend or redemption payment would have complied with the provisions of the this Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition making of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company Restricted Payment in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed ) or from the substantially concurrent if such redemptioncontribution of common equity capital to the Company (in each case, repurchase, retirement, defeasance or acquisition occurs not more other than 120 days after such salein connection with any Excluded Contribution); provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition Restricted Payment will be excluded from clause (3)(bSection 4.07(a)(4)(C)(ii) of the preceding paragraphhereof;
(3) the defeasancerepurchase, redemption, repurchase, retirement defeasance or other acquisition or retirement for value of subordinated Subordinated Indebtedness of the Company or any Subsidiary Guarantor with the net cash proceeds from an incurrence of, or in exchange for, a substantially concurrent Incurrence of Permitted Refinancing Indebtedness;
(4) the payment of any dividend (or, in the case of any partnership or distribution limited liability company, any similar distribution) by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, director or employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or planagreement, stock option agreement, shareholders’ agreement or similar agreement or planagreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 US$1.0 million in any twelve-month period;
(6) the acquisition repurchase of Equity Interests deemed to occur upon the exercise of stock options to the extent such Equity Interests represent a portion of the exercise price of those stock options;
(7) the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Stock of the Company or any Restricted Subsidiary of the Company issued on or after the Issue Date in accordance with the Fixed Charge Coverage Ratio test described in Section 4.09(a) hereof;
(8) any Restricted Payment made or deemed to be made by the Company or a Restricted Subsidiary of the Company under, pursuant to or in connection with the Services and Right to Use Agreement, the Reinvestment Agreement or the MSA;
(9) [RESERVED];
(10) Restricted Payments that are made with Excluded Contributions;
(11) payments to any parent entity in respect of directors’ fees, remuneration and expenses (including director and officer insurance (including premiums therefore)) to the extent relating to the Company and its Subsidiaries, in an aggregate amount not to exceed US$2.0 million per annum;
(12) the making of Restricted Payments, if applicable:
(A) in amounts required for any direct or indirect parent of the Company to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of the Company and general corporate operating and overhead expenses of any direct or indirect parent of the Company in each case to the extent such fees and expenses are attributable to the ownership or operation of the Company, if applicable, and its Subsidiaries, in an aggregate amount not to exceed US$2.0 million per annum;
(B) in amounts required for any direct or indirect parent of the Company, if applicable, to pay interest and/or principal on Indebtedness the proceeds of which have been contributed to the Company or any of its Restricted Subsidiaries prior to the Issue Date and that has been guaranteed by, or is otherwise considered Indebtedness of, the Company Incurred in accordance with Section 4.09; provided that the amount of any such proceeds will be excluded from Section 4.07(a)(4)(C)(ii);
(C) in amounts required for any direct or indirect parent of the Company to pay fees and expenses, other than to Affiliates of the Company, related to any unsuccessful equity or debt offering of such parent; and
(D) payments for services under any Revenue Sharing Agreement that would constitute or be deemed to constitute a Restricted Payment;
(13) any Restricted Payment used to fund the Transactions and the payment of fees and expenses incurred in connection with the Transactions or owed by the Company or any direct or indirect parent of the Company or its Restricted Subsidiaries to Affiliates, and any other payments made, including any such payments made to any direct or indirect parent of the Company to enable it to make payments, in connection with the consummation of the Transactions, whether payable on the Issue Date or thereafter, in each case on terms described in the Offering Memorandum under “Use of Proceeds” and to the extent permitted by Section 4.11;
(14) any Restricted Payments, to the extent required to be made by any Gaming Authority having jurisdiction over the Company or any of its Restricted Subsidiaries or Melco Resorts Macau (or any other operator of the Studio City Casino);
(15) cash payments in lieu of the issuance of fractional shares in connection with the exercise of stock warrants, options or stock appreciation rights by way other securities convertible into or exchangeable for Capital Stock of cashless exercisethe Company or any Restricted Subsidiary; provided, however, that any such cash payment shall not be for the purpose of evading the limitation of this Section 4.07;
(716) the purchase, repurchase, redemption, defeasance redemption or other acquisition or retirement for value of subordinated any Subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% Guarantor pursuant to provisions similar to those described under Section 4.15, provided that all Notes tendered by holders of the principal amount thereof (plus accrued and unpaid interest) Notes in the event of connection with a Change of Control in accordance with provisions similar Offer have been repurchased, redeemed or acquired for value;
(17) payments or distributions to Section 4.15 or (b) at a purchase price not greater than 100.0% dissenting stockholders of Capital Stock of the principal amount thereof (plus accrued Company pursuant to applicable law in connection with a consolidation, merger or transfer of all or substantially all of the assets of the Company and unpaid interest) in accordance its Restricted Subsidiaries, taken as a whole, that complies with provisions similar to Section 4.105.01; provided thatthat as a result of such consolidation, prior to merger or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirementtransfer of assets, the Company has shall have made the a Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes (if required by this Indenture) and has completed the repurchase or redemption of that all Notes validly tendered for payment by holders in connection with such Change of Control Offer have been repurchased, redeemed or Asset Sale Offer;acquired for value; and
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(918) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; US$15.0 million since the Issue Date, provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause clauses (912), (13) and (18) of this Section 4.07(b), no Default or Event of Default shall have occurred and be continuing or would be caused therebyoccur as a consequence thereof. The amount of all Restricted Payments (other than cash) will be the fair market value Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value Fair Market Value of any assets or securities that are required to be valued by this covenant Section 4.07 will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, determined by the Board of Directors of the Company, Company whose determination shall resolution with respect thereto will be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver delivered to the Trustee as set forth in an Officers’ Officer’s Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories Company. The Company’s Board of Restricted Payments described in Directors’ determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of international standing (an “Independent Financial Advisor”) if the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Fair Market Value exceeds US$45.0 million.
Appears in 2 contracts
Sources: Indenture (STUDIO CITY INTERNATIONAL HOLDINGS LTD), Indenture (Melco Resorts & Entertainment LTD)
Limitation on Restricted Payments. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:, take any of the following actions (each, a "Restricted Payment"):
(1) declare or pay any dividend or return of capital or make any other payment or distribution on account or in respect of the Company’s or any shares of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which Capital Stock of the Company or any of its Restricted Subsidiaries is a party) or Subsidiary to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Capital Stock, other than:
(other than i) dividends or distributions payable in Equity Interests (other than Disqualified Stock) Qualified Capital Stock of the Company Company,
(ii) dividends or distributions payable to the Company and/or a Restricted Subsidiary, or
(iii) pro rata dividends or distributions to the Company and/or a Restricted Subsidiary and minority holders of the Company)Capital Stock of a Restricted Subsidiary;
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company other than any Capital Stock owned by the Company or any direct or indirect parent of the Companya Restricted Subsidiary;
(3) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled final maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchaseas the case may be, redemption, defeasance or any Subordinated Indebtedness other acquisition of any such than Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionpermitted under Section 3.9(b)(6); or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”than Permitted Investments), unless, ; if at the time of and the Restricted Payment immediately after giving effect to such Restricted Paymentthereto:
(1i) no a Default or an Event of Default has shall have occurred and is continuing or would occur as a consequence of such Restricted Paymentbe continuing;
(2ii) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted is not able to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.093.9(a); andor
(3iii) such Restricted Payment, together with the aggregate amount (the amount expended for these purposes, if other than in cash, being the Fair Market Value of the relevant property) of the proposed Restricted Payment and all other Restricted Payments made subsequent to the Issue Date up to the date thereof, less the aggregate amount of Investment Return on all Investments covered by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) that definition as of the next succeeding paragraph)date thereof, is less than shall exceed the sum, without duplication, sum of:
(a1) 50% of the cumulative Consolidated Net Income or, if cumulative Consolidated Net Income is a loss, minus 100% of the Company for loss, accrued during the period (taken period, treated as one accounting period) from April 1, 2004 beginning with the first full fiscal quarter that follows the Issue Date to the end of the Company’s most recently ended recent fiscal quarter for which internal consolidated financial statements are available at information of the time of such Restricted Payment (or, if such Consolidated Net Income for such period Company is a deficit, less 100% of such deficit), available; plus
(b2) 100% of the aggregate net cash proceeds (including net cash proceeds received upon the conversion of non cash proceeds) received by the Company (including the fair market value of from any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or Person from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.
Appears in 2 contracts
Sources: Indenture (Constar International Inc), Indenture (Constar Inc)
Limitation on Restricted Payments. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which involving the Company or any of its Restricted Subsidiaries is a partySubsidiaries) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company and other than dividends or distributions payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which involving the Company is a partyCompany) any Equity Interests of the Company or any of its direct or indirect parent of the Companyparents;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Subordinated Indebtedness that is subordinated to of the Notes Company or any Subsidiary Guarantor (excluding any intercompany Indebtedness between or among the Subsidiary Guarantees prior to Company and any scheduled repayment or scheduled maturityof its Restricted Subsidiaries), except a payment, purchase, redemption, defeasance payment of interest or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or at the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment Investment, (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1A) no Default or Event of Default has shall have occurred and is be continuing or would occur as a consequence of such Restricted Paymentthereof;
(2B) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur Incur at least $US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.094.09(a) hereof; and
(3C) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 since the Issue Date (excluding Restricted Payments permitted by clauses (2) through (12) of Section 4.07(b), (3), (4), (6), (7) and (8) of the next succeeding paragraph)pursuant to this Indenture, is less than the sum, without duplication, sum of:
(ai) 5075% of the Consolidated Net Income EBITDA of the Company less 2.00 times Fixed Charges for the period (taken as one accounting period) from April 1, 2004 the beginning of the fiscal quarter in which the Notes are issued to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income EBITDA for such period is a deficit, less minus 100% of such deficit), ; plus
(bii) 100% of the aggregate net cash proceeds received by the Company (including since the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 Issue Date as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) of the Company (in each case, other than in connection with any Excluded Contribution) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), ; plus
(ciii) to the extent that any Restricted Investment that was made after May 11, 2004 the Issue Date (x) is reduced as a result of payments of dividends to the Company or a Restricted Subsidiary of the Company or (y) is sold for cash or otherwise liquidated or repaid for cash, (in the case of sub-clauses (x) and (y)) the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment or (z) is reduced upon the release of a Note Guarantee granted by the Company or a Restricted Subsidiary of the Company that constituted a Restricted Investment, to the extent that the initial granting of such Note Guarantee reduced the restricted payments capacity under Section 4.07(a)(4)(C); plus
(div) to the extent that any Unrestricted Subsidiary of the Company designated as such after the Issue Date is redesignated re-designated as a Restricted Subsidiary after May 11, 2004the Issue Date, the lesser of (i) the fair market value Fair Market Value of the Company’s Restricted Investment in such Subsidiary as of the date of such redesignation re-designation or (ii) such fair market value as the Fair Market Value of the net aggregate Investments made by the Company or a Restricted Subsidiary of the Company in such Unrestricted Subsidiary from the date on which such Subsidiary entity was originally designated as an Unrestricted Subsidiary. Subsidiary through the date of such re-designation; plus
(v) 100% of the aggregate amount received from the sale of the stock of any Unrestricted Subsidiary of the Company after the Issue Date or 100% of any dividends received by the Company or a Restricted Subsidiary of the Company after the Issue Date from an Unrestricted Subsidiary of the Company.
(b) The preceding provisions of Section 4.07(a) hereof will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such the dividend or giving of the delivery of any irrevocable notice of redemptionredemption notice, as the case may be, if the dividend, distribution or redemption payment on at the date of declaration or notice, the date of the notice of redemption, as the case may be, dividend or redemption payment would have complied with the provisions of the this Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition making of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company Restricted Payment in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed ) or from the substantially concurrent if such redemptioncontribution of common equity capital to the Company (in each case, repurchase, retirement, defeasance or acquisition occurs not more other than 120 days after such salein connection with any Excluded Contribution); provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition Restricted Payment will be excluded from clause (3)(bSection 4.07(a)(4)(C)(ii) of the preceding paragraphhereof;
(3) the defeasancerepurchase, redemption, repurchase, retirement defeasance or other acquisition or retirement for value of subordinated Subordinated Indebtedness of the Company or any Subsidiary Guarantor with the net cash proceeds from an incurrence of, or in exchange for, a substantially concurrent Incurrence of Permitted Refinancing Indebtedness;
(4) the payment of any dividend (or, in the case of any partnership or distribution limited liability company, any similar distribution) by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, director or employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or planagreement, stock option agreement, shareholders’ agreement or similar agreement or planagreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 US$1.0 million in any twelve-month period;
(6) the acquisition repurchase of Equity Interests deemed to occur upon the exercise of stock options to the extent such Equity Interests represent a portion of the exercise price of those stock options;
(7) the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Stock of the Company or any Restricted Subsidiary of the Company issued on or after the Issue Date in accordance with the Fixed Charge Coverage Ratio test described in Section 4.09(a) hereof;
(8) any Restricted Payment made or deemed to be made by the Company or a Restricted Subsidiary of the Company under, pursuant to or in connection with the Services and Right to Use Agreement, the Reinvestment Agreement or the MSA;
(9) [RESERVED];
(10) Restricted Payments that are made with Excluded Contributions;
(11) payments to any parent entity in respect of directors’ fees, remuneration and expenses (including director and officer insurance (including premiums therefore)) to the extent relating to the Company and its Subsidiaries, in an aggregate amount not to exceed US$2.0 million per annum;
(12) the making of Restricted Payments, if applicable:
(A) in amounts required for any direct or indirect parent of the Company to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of the Company and general corporate operating and overhead expenses of any direct or indirect parent of the Company in each case to the extent such fees and expenses are attributable to the ownership or operation of the Company, if applicable, and its Subsidiaries, in an aggregate amount not to exceed US$2.0 million per annum;
(B) in amounts required for any direct or indirect parent of the Company, if applicable, to pay interest and/or principal on Indebtedness the proceeds of which have been contributed to the Company or any of its Restricted Subsidiaries prior to the Issue Date and that has been guaranteed by, or is otherwise considered Indebtedness of, the Company Incurred in accordance with Section 4.09; provided that the amount of any such proceeds will be excluded from Section 4.07(a)(4)(C)(ii);
(C) in amounts required for any direct or indirect parent of the Company to pay fees and expenses, other than to Affiliates of the Company, related to any unsuccessful equity or debt offering of such parent; and
(D) payments for services under any Revenue Sharing Agreement that would constitute or be deemed to constitute a Restricted Payment;
(13) any Restricted Payment used to fund the Transactions and the payment of fees and expenses incurred in connection with the Transactions or owed by the Company or any direct or indirect parent of the Company or its Restricted Subsidiaries to Affiliates, and any other payments made, including any such payments made to any direct or indirect parent of the Company to enable it to make payments, in connection with the consummation of the Transactions, whether payable on the Issue Date or thereafter, in each case on terms described in the Offering Memorandum under “Use of Proceeds” and to the extent permitted by Section 4.11;
(14) any Restricted Payments, to the extent required to be made by any Gaming Authority having jurisdiction over the Company or any of its Restricted Subsidiaries or Melco Resorts Macau (or any other operator of the Studio City Casino);
(15) cash payments in lieu of the issuance of fractional shares in connection with the exercise of stock warrants, options or stock appreciation rights by way other securities convertible into or exchangeable for Capital Stock of cashless exercisethe Company or any Restricted Subsidiary; provided, however, that any such cash payment shall not be for the purpose of evading the limitation of this Section 4.07;
(716) the purchase, repurchase, redemption, defeasance redemption or other acquisition or retirement for value of subordinated any Subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% Guarantor pursuant to provisions similar to those described under Section 4.15, provided that all Notes tendered by holders of the principal amount thereof (plus accrued and unpaid interest) Notes in the event of connection with a Change of Control in accordance with provisions similar Offer have been repurchased, redeemed or acquired for value;
(17) payments or distributions to Section 4.15 or (b) at a purchase price not greater than 100.0% dissenting stockholders of Capital Stock of the principal amount thereof (plus accrued Company pursuant to applicable law in connection with a consolidation, merger or transfer of all or substantially all of the assets of the Company and unpaid interest) in accordance its Restricted Subsidiaries, taken as a whole, that complies with provisions similar to Section 4.105.01; provided thatthat as a result of such consolidation, prior to merger or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirementtransfer of assets, the Company has shall have made the a Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes (if required by this Indenture) and has completed the repurchase or redemption of that all Notes validly tendered for payment by holders in connection with such Change of Control Offer have been repurchased, redeemed or Asset Sale Offer;acquired for value; and
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(918) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; US$15.0 million since the Issue Date, provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause clauses (912), (13) and (18) of this Section 4.07(b), no Default or Event of Default shall have occurred and be continuing or would be caused therebyoccur as a consequence thereof. The amount of all Restricted Payments (other than cash) will be the fair market value Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value Fair Market Value of any assets or securities that are required to be valued by this covenant Section 4.07 will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, determined by the Board of Directors of the Company, Company whose determination shall resolution with respect thereto will be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver delivered to the Trustee as set forth in an Officers’ Officer’s Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories Company. The Company’s Board of Restricted Payments described in Directors’ determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of international standing (an “Independent Financial Advisor”) if the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Fair Market Value exceeds US$45.0 million.
Appears in 2 contracts
Sources: Indenture (STUDIO CITY INTERNATIONAL HOLDINGS LTD), Indenture (Melco Resorts & Entertainment LTD)
Limitation on Restricted Payments. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly:
(1i) declare or pay any dividend on, or make any other payment or distribution on account of the Company’s or to holders of, any shares of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Capital Stock (other than dividends or distributions payable solely in Equity Interests shares of its Capital Stock (other than Disqualified Capital Stock) of the Company or payable in options, warrants or other rights to acquire such Capital Stock and other than dividends and distributions paid by a Restricted Subsidiary to the Company or a to another Restricted Subsidiary of the CompanySubsidiary);,
(2ii) purchase, redeem or otherwise acquire or retire for value value, directly or indirectly, any shares of the Capital Stock of the Company or any Restricted Subsidiary or options, warrants or other rights to acquire such Capital Stock,
(iii) make any principal payment on, or repurchase, redeem, defease, retire or otherwise acquire for value, prior to the relevant scheduled principal payment, sinking fund or maturity, any Subordinated Indebtedness, or
(iv) make any Investment in any Person, including, without limitation, any Unrestricted Subsidiary (other than a Permitted Investment) (the foregoing actions described in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1i) through (4iv) above being hereinafter collectively referred to as “"Restricted Payments”), unless, at the time of and ") unless after giving effect to such the proposed Restricted Payment:
, (1A) no Default or Event of Default has shall have occurred and is be continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of and such Restricted Payment shall not cause or constitute a Default or an Event of Default; (B) immediately before and immediately after giving effect to such transaction on a pro forma effect thereto as if such Restricted Payment had been made at basis, the beginning of the applicable four-quarter period, have been permitted to Company could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.093.8(a); and
and (3C) such Restricted Payment, together with the aggregate amount of all other such Restricted Payments made (the amount of any such Restricted Payment, if other than cash, to be determined in good faith by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) Board of Directors of the next succeeding paragraph)Company, is less than whose determination shall be conclusive and evidenced by a resolution of the sum, without duplication, Board of Directors) declared or made after the Issue Date (including such Restricted Payment) does not exceed the sum of:
(a1) 50% of the aggregate cumulative Consolidated Net Income (or, if such aggregate cumulative Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company for accrued on a cumulative basis during the period (taken as one accounting period) from April 1, 2004 the fiscal quarter that first begins after the Issue Date to the end of the Company’s 's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the IndenturePayment;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of aggregate Net Cash Proceeds received after the Issue Date by the Company from the issuance or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary any of the Companyits Subsidiaries) of, Equity Interests of the Company its shares of Capital Stock (other than Disqualified Capital Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence ofoptions, warrants or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company rights to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all purchase such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(sDisqualified Capital Stock) or securities proposed other cash contributions to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, its capital (excluding amounts used pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment clauses (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7ii) or (8)iii) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this of Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (93.9(b), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.);
Appears in 2 contracts
Sources: Senior Subordinated Loan Agreement (Schein Pharmaceutical Inc), Senior Subordinated Loan Agreement (Danbury Pharmacal Puerto Rico Inc)
Limitation on Restricted Payments. The Company will notAt any time a Collateral/Covenant Release Period is not in effect, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend (other than dividends payable solely in Capital Stock (other than Disqualified Stock)) of Holding, Intermediate Holding or the Company or options, warrants or other rights to purchase Capital Stock of Holding, Intermediate Holding or the Company, on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of the Company or any warrants or options to purchase any such Capital Stock, whether now or hereafter outstanding, or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable solely in Equity Interests Capital Stock (other than Disqualified Stock) of Holding, Intermediate Holding or the Company or payable options, warrants or other rights to the Company purchase Capital Stock of Holding, Intermediate Holding or a Restricted Subsidiary of the Company);
) in respect thereof (2) purchaseany such dividend, redeem or otherwise acquire or retire for value (includingpayment, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a paymentset apart, purchase, redemption, defeasance defeasance, retirement, acquisition or other acquisition of any such Indebtedness in anticipation of satisfying distribution, a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted PaymentsPayment”), unlesseither directly or indirectly, at the time of and after giving effect to such Restricted Payment:
(1) no Default whether in cash or Event of Default has occurred and is continuing property or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning in obligations of the applicable four-quarter periodCompany, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, ofexcept that:
(a) 50% of the Consolidated Net Income of the Company for may declare and pay cash dividends in an amount sufficient to allow Holding and/or Intermediate Holding to pay expenses incurred in the period (taken as one accounting period) from April 1, 2004 to the end ordinary course of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plusbusiness;
(b) 100% the Company may declare and pay cash dividends in an amount sufficient to cover reasonable and necessary expenses (including professional fees and expenses) incurred by Holding and/or Intermediate Holding in connection with (i) registration, public offerings and exchange listing of equity or debt securities and maintenance of the aggregate net cash proceeds received by same, (ii) compliance with reporting obligations under, or in connection with compliance with, federal or state laws or under this Agreement or any of the Company other Loan Documents and (iii) indemnification and reimbursement of directors, officers and employees in respect of liabilities relating to their serving in any such capacity, or obligations in respect of director and officer insurance (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stockpremiums therefor)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus;
(c) the Company may declare and pay cash dividends to Intermediate Holding in an amount not in excess of the extent amount necessary to pay income Taxes to be paid by Intermediate Holding, Holding and any other Person that owns any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, Capital Stock in Intermediate Holding to any taxing authority imposed on their respective allocable shares of the lesser taxable income of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) Intermediate Holding and (ii) the initial amount of such Restricted Investment, plusits Subsidiaries;
(d) to the extent that any Unrestricted Subsidiary of constituting a Restricted Payment, the Company is redesignated as a Restricted Subsidiary after May 11, 2004, and its Subsidiaries may consummate the lesser issuance or sale of Capital Stock (iother than Disqualified Stock) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenturepermitted by subsection 8.6(j);
(2e) the redemptionCompany may declare and pay cash dividends in an amount sufficient to allow Holding and/or Intermediate Holding to pay all fees and expenses incurred in connection with the transactions expressly contemplated by this Agreement and the other Loan Documents, and to allow Holding and/or Intermediate Holding to perform its obligations under or in connection with the Loan Documents to which it is a party;
(f) the Company may redeem, repurchase, retirementretire, defeasance defease or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company otherwise acquire its Capital Stock in exchange for, or out of the net cash proceeds of of, the substantially concurrent sale or issuance (other than to a Subsidiary Subsidiary) of the Company) of, Equity Interests of the Company its Capital Stock (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3g) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness Company may pay any dividend within 60 days after the date of the Company or any Guarantor declaration of the dividend by Holding if, at the date of declaration, the dividend payment would have complied with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtednessprovisions of this subsection 8.7;
(4h) the payment Company may declare and pay other Restricted Payments so long as (i) the Company is in Pro Forma Compliance after giving effect thereto, (ii) no Event of any dividend Default exists or distribution by a would result therefrom and (iii) the aggregate amount of Restricted Subsidiary Payments previously made pursuant to this subsection 8.7(h) after the Available Amount Start Date is not in excess of the Company Cumulative Available Amount in effect on such date and not being utilized for Investments pursuant to subsection 8.8(p) (and such Restricted Payments shall then reduce the holders Cumulative Available Amount as provided therein on the date of its Equity Interests on a pro rata basispayment thereof);
(5i) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued declare and unpaid interest) in the event of a Change of Control make dividend payments in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments its dividend policy in an aggregate amount since May 11, 2004 not to exceed $25.0 million125,000,000 in any fiscal year; providedand
(j) so long as no Event of Default exists or would result therefrom the Company may declare and pay additional Restricted Payments, however, that at in an unlimited amount if the time of, and Consolidated Total Leverage Ratio is less than 3.50 to 1.00 (calculated as of the date of such proposed Restricted Payments in accordance with the definition of “Pro Forma Compliance” after giving effect to, any to such proposed Restricted Payment permitted under the preceding clause (9Payments), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes the avoidance of determining compliance with this Section 4.07doubt, in the event that a Restricted Payment meets the criteria of more than one of the categories aggregate amount of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to subsection 8.7(j) shall not reduce the first paragraph aggregate amount of this Section 4.07, the Company will be Restricted Payments that are permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07under subsection 8.7(h).
Appears in 2 contracts
Sources: Fifth Amended and Restated Credit Agreement (Graphic Packaging Holding Co), Credit Agreement (Graphic Packaging Holding Co)
Limitation on Restricted Payments. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which involving the Company or any of its Restricted Subsidiaries is a partySubsidiaries) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company and other than dividends or distributions payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which involving the Company is a partyCompany) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Subordinated Indebtedness that is subordinated to of the Notes Company or any Subsidiary Guarantor (excluding any intercompany Indebtedness between or among the Subsidiary Guarantees prior to Company and any scheduled repayment or scheduled maturityof its Restricted Subsidiaries), except a payment, purchase, redemption, defeasance payment of interest or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or at the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment Investment, (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1A) no Default or Event of Default has shall have occurred and is be continuing or would occur as a consequence of such Restricted Paymentthereof;
(2B) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur Incur at least $US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof;
(C) the first paragraph of Section 4.09Opening Date has occurred; and
(3D) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 since the Issue Date (excluding Restricted Payments permitted by clauses (2), ) through (3), (4), (6), (712) and (8) of the next succeeding paragraphSection 4.07(b), is less than the sum, without duplication, of:
(ai) 5075% of the Consolidated Net Income EBITDA of the Company less 2.25 times Fixed Charges for the period (taken as one accounting period) from April 1, 2004 the beginning of the fiscal quarter during which the Opening Date occurs to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income EBITDA for such period is a deficit, less minus 100% of such deficit), ; plus
(bii) 100% of the aggregate net cash proceeds received by the Company (including since the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 Issue Date as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) of the Company (in each case, other than in connection with any Excluded Contribution or Sponsor Project Contribution) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), ; plus
(ciii) to the extent that any Restricted Investment that was made after May 11, 2004 the Issue Date (x) is reduced as a result of payments of dividends to the Company or a Restricted Subsidiary or (y) is sold for cash or otherwise liquidated or repaid for cash, (in the case of sub-clauses (x) and (y)) the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment or (z) is reduced upon the release of a Guarantee granted by the Company or a Restricted Subsidiary that constituted a Restricted Investment, to the extent that the initial granting of such Guarantee reduced the restricted payments capacity under Section 4.07(a)(D); plus
(div) to the extent that any Unrestricted Subsidiary of the Company designated as such after the Issue Date is redesignated re-designated as a Restricted Subsidiary after May 11, 2004the Issue Date, the lesser of (i) the fair market value Fair Market Value of the Company’s Restricted Investment in such Subsidiary as of the date of such redesignation re-designation or (ii) such fair market value as the Fair Market Value of the net aggregate Investments made by the Company or a Restricted Subsidiary in such Unrestricted Subsidiary from the date on which such Subsidiary entity was originally designated as an Unrestricted Subsidiary. Subsidiary through the date of such re-designation; plus
(v) 100% of the aggregate amount received from the sale of the stock of any Unrestricted Subsidiary of the Company after the Issue Date or 100% of any dividends received by the Company or a Restricted Subsidiary after the Issue Date from an Unrestricted Subsidiary of the Company.
(b) The preceding provisions of Section 4.07(a) hereof will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such the dividend or giving of the delivery of any irrevocable notice of redemptionredemption notice, as the case may be, if the dividend, distribution or redemption payment on at the date of declaration or notice, the date of the notice of redemption, as the case may be, dividend or redemption payment would have complied with the provisions of the this Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition making of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company Restricted Payment in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed ) or from the substantially concurrent if such redemptioncontribution of common equity capital to the Company (in each case, repurchase, retirement, defeasance other than in connection with any Excluded Contribution or acquisition occurs not more than 120 days after such saleSponsor Project Contribution); provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition Restricted Payment will be excluded from clause (3)(bSection 4.07(a)(D)(ii) of the preceding paragraphhereof;
(3) the defeasancerepurchase, redemption, repurchase, retirement defeasance or other acquisition or retirement for value of subordinated Subordinated Indebtedness of the Company or any Subsidiary Guarantor with the net cash proceeds from an incurrence of, or in exchange for, a substantially concurrent Incurrence of Permitted Refinancing Indebtedness;
(4) the payment of any dividend (or, in the case of any partnership or distribution limited liability company, any similar distribution) by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, director or employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or planagreement, stock option agreement, shareholders’ agreement or similar agreement or planagreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 US$1.0 million in any twelve-month period;
(6) the acquisition repurchase of Equity Interests deemed to occur upon the exercise of stock options to the extent such Equity Interests represent a portion of the exercise price of those stock options;
(7) the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Stock of the Company or any Restricted Subsidiary of the Company issued on or after the Issue Date in accordance with the Fixed Charge Coverage Ratio test described in Section 4.09(a) hereof;
(8) any Restricted Payment made or deemed to be made by the Company or a Restricted Subsidiary under, pursuant to or in connection with the CMA or the Reinvestment Agreement;
(9) to the extent constituting Restricted Payments, the payment of Project Costs as permitted pursuant to the Disbursement Agreements;
(10) Restricted Payments that are made with Excluded Contributions;
(11) Restricted Payments made or deemed to be made with Excluded Project Revenues; provided the amount of such Restricted Payment will be excluded from Section 4.07(a)(D)(v);
(12) the making of Restricted Payments, if applicable:
(A) in amounts required for any direct or indirect parent of the Company to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of the Company and general corporate operating and overhead expenses of any direct or indirect parent of the Company in each case to the extent such fees and expenses are attributable to the ownership or operation of the Company, if applicable, and its Subsidiaries, in an aggregate amount not to exceed US$1.0 million per annum;
(B) in amounts required for any direct or indirect parent of the Company, if applicable, to pay interest and/or principal on Indebtedness the proceeds of which have been contributed to the Company or any of its Restricted Subsidiaries and that has been guaranteed by, or is otherwise considered Indebtedness of, the Company Incurred in accordance with Section 4.09; provided that the amount of any such proceeds will be excluded from Section 4.07(a)(D)(ii);
(C) in amounts required for any direct or indirect parent of the Company to pay fees and expenses, other than to Affiliates of the Company, related to any unsuccessful equity or debt offering of such parent; and
(D) payments for services under any Revenue Sharing Agreement that would constitute or be deemed to constitute a Restricted Payment;
(13) any Restricted Payment used to fund the Transactions and the payment of fees and expenses incurred in connection with the Transactions or owed by the Company or any direct or indirect parent of the Company or Restricted Subsidiaries of the Company to Affiliates, and any other payments made, including any such payments made to any direct or indirect parent of the Company to enable it to make payments, in connection with the consummation of the Transactions, whether payable on the Issue Date or thereafter, in each case on terms described in the Offering Memorandum under “Use of Proceeds” and to the extent permitted by Section 4.11;
(14) payments to a direct or indirect parent company of the Company to reimburse such parent entity for reasonably documented costs and expenses associated with the development and construction of the Phase I Project incurred in the event the Company or any Restricted Subsidiary of the Company is unable to satisfy certain conditions to disbursement from the Note Proceeds Account (other than the condition that the funding of the Sponsors in an aggregate amount of US$825.0 million must be exhausted prior to any disbursement from the Note Proceeds Account) in accordance with the Note Disbursement and Account Agreement or under the Senior Secured Credit Facilities or from the Senior Disbursement Account in accordance with the Senior Disbursement Agreement; provided, the amount of any such payment does not exceed the net cash proceeds received by the Company since the Issue Date for the purposes described in this clause (14) either (a) as a contribution to its common equity or from the issue or sale of Equity Interests (other than Disqualified Stock) of the Company (and the amount of any such proceeds will be excluded from Section 4.07(a)(D)(ii) or (b) from the proceeds of the issuance of Subordinated Shareholder Debt; provided, any such payments made in accordance with this clause (b) shall be made through repayment of such Subordinated Shareholder Debt (including, for the avoidance of doubt, through voluntary prepayment thereof);
(15) any Restricted Payments, to the extent required to be made by any Gaming Authority having jurisdiction over the Company or any of its Restricted Subsidiaries or Melco Crown Gaming;
(16) cash payments in lieu of the issuance of fractional shares in connection with the exercise of stock warrants, options or stock appreciation rights by way other securities convertible into or exchangeable for Capital Stock of cashless exercisethe Company or any Restricted Subsidiary; provided, however, that any such cash payment shall not be for the purpose of evading the limitation of this Section 4.07;
(717) the purchase, repurchase, redemption, defeasance redemption or other acquisition or retirement for value of subordinated any Subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% Guarantor pursuant to provisions similar to those described under Section 4.15, provided that all Notes tendered by holders of the principal amount thereof (plus accrued and unpaid interest) Notes in the event of connection with a Change of Control in accordance with provisions similar Offer have been repurchased, redeemed or acquired for value;
(18) payments or distributions to Section 4.15 or (b) at a purchase price not greater than 100.0% dissenting stockholders of Capital Stock of the principal amount thereof (plus accrued Company pursuant to applicable law in connection with a consolidation, merger or transfer of all or substantially all of the assets of the Company and unpaid interest) in accordance its Restricted Subsidiaries, taken as a whole, that complies with provisions similar to Section 4.105.01; provided thatthat as a result of such consolidation, prior to merger or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirementtransfer of assets, the Company has shall have made the a Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes (if required by this Indenture) and has completed the repurchase or redemption of that all Notes validly tendered for payment by holders in connection with such Change of Control Offer have been repurchased, redeemed or Asset Sale Offer;acquired for value; and
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(919) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 millionUS$10.0 million since the Issue Date; provided that the Opening Date has occurred, provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause clauses (912), (13), (14) and (19) of this Section 4.07(b), no Default or Event of Default shall have occurred and be continuing or would be caused therebyoccur as a consequence thereof. The amount of all Restricted Payments (other than cash) will be the fair market value Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value Fair Market Value of any assets or securities that are required to be valued by this covenant Section 4.07 will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, determined by the Board of Directors of the Company, Company whose determination shall resolution with respect thereto will be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver delivered to the Trustee as set forth in an OfficersOfficer’s Certificate. The Board of Directors’ Certificate stating that such Restricted Payment is permitted and setting forth determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of international standing if the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Fair Market Value exceeds US$30.0 million.
Appears in 2 contracts
Sources: Indenture (STUDIO CITY INTERNATIONAL HOLDINGS LTD), Indenture (Melco Crown Entertainment LTD)
Limitation on Restricted Payments. The Company will Until such time as --------------------------------- the Securities are rated Investment Grade, ▇▇▇▇ ▇▇ shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
, (1i) declare or pay any dividend on, or make any other payment or distribution on account of the Company’s in respect of, ▇▇▇▇ IV's or any of its Restricted Subsidiaries’ ' Capital Stock or other Equity Interests (includingInterests, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or except to the direct extent any such dividend or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company distribution is actually received by ▇▇▇▇ ▇▇ or a Restricted Subsidiary of the Company);
thereof, (2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with consideration any merger Capital Stock or consolidation to which the Company is a party) any other Equity Interests of the Company ▇▇▇▇ ▇▇ or any direct of its Subsidiaries (other than Equity Interests of ▇▇▇▇ IV's Wholly-owned Subsidiaries) or indirect parent of the Company;
(3) make any principal payment on or with respect to, or voluntarily purchase, redeem, defease redeem or otherwise acquire or retire for value consideration, prior to a scheduled mandatory sinking fund payment date or maturity date (including, but not limited to, by substantive or legal defeasance), any Indebtedness of ▇▇▇▇ ▇▇ that is subordinated junior in right of payment to the Notes Securities other than in connection with the refinancing of such Indebtedness to the extent permitted by this Indenture and certain intercompany Indebtedness between ▇▇▇▇ ▇▇ and any of its Subsidiaries or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturitybetween such Subsidiaries (each such declaration, except a paymentdistribution, purchase, redemption, defeasance acquisition, retirement, loan, advance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above investment being collectively referred to as “a "Restricted Payments”Payment"), unless, if at the time of and such action, or after giving effect to such Restricted Restrict Payment:
(1a) no Default or an Event of Default has or a Default shall have occurred and is continuing or would occur as a consequence of such Restricted Paymentbe continuing;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3b) such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made by after March 15, 1993, exceeds the Company and its Restricted Subsidiaries after May 11, 2004 sum of: (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(aw) 50% of the cumulative Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value any gains or losses attributable to Asset Sales, net of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital related tax costs or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemptiontax benefits, as the case may be, if during the dividendapplicable reference period but excluding non-cash charges resulting from the adoption by the Company of SFAS 121 and/or other new accounting standards consistent with GAAP), distribution or redemption payment for the period commencing on March 1, 1993 through the date of declaration or the date last day of the notice fiscal quarter immediately preceding such proposed Restricted Payment (or if Consolidated Net Income shall be a deficit, minus 100% of redemption, as the case may be, would have complied with the provisions of the Indenture;
such deficit); (2x) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the aggregate net cash proceeds and the fair market value (as determined in good faith by the Board of the substantially concurrent sale Directors) of marketable securities or other property, if any, received by ▇▇▇▇ ▇▇ (other than to from a Subsidiary of ▇▇▇▇ ▇▇) from the Company) of, Equity Interests issuance and sale of the Company either Capital Stock (other than Disqualified Redeemable Stock)) or Indebtedness that is convertible into Capital Stock, with a sale being deemed substantially concurrent if to the extent such redemptionIndebtedness is actually converted into Capital Stock after March 15, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale1993; provided that (y) the amount fair market value (as determined in good faith by the Board of Directors) of any such net cash proceeds that are utilized for any such redemptionshares of Capital Stock (other than Redeemable Stock) of ▇▇▇▇ ▇▇ issued after March 15, repurchase, retirement, defeasance 1993 pursuant to a plan or other acquisition will be excluded from clause (3)(b) arrangement approved by the Compensation Committee of the preceding paragraph;
(3) Board of Directors, to or for the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment benefit of any dividend or distribution by a Restricted Subsidiary employee of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company ▇▇▇▇ ▇▇ or any of its Restricted Subsidiaries pursuant or to or by any equity subscription agreement or plan, employee stock option agreement ownership plan or similar agreement or plan; provided that trust for the aggregate price paid for all benefit of any such repurchasedemployee, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) each case to the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for extent such value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) is includable as compensation expense in the event computation of a Change of Control in accordance with provisions similar to Section 4.15 or Consolidated Net Income; and (bz) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07$45,000,000; or
(9c) ▇▇▇▇ ▇▇ could not incur at least $1.00 of additional Indebtedness (other Restricted Payments in an aggregate amount since May 11than Permitted Indebtedness) pursuant to the first paragraph of Section 4.08. The foregoing provisions will not prohibit, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), so long as no Default or Event of Default shall have occurred and be continuing continuing: (i) the payment of any dividend within 60 days after the date of declaration thereof, if at the date of declaration thereof such payment would comply with the provisions of this Indenture; (ii) the declaration or would be caused therebypayment of any dividend on shares of Capital Stock payable solely in shares of Capital Stock of ▇▇▇▇ ▇▇ (other than Redeemable Stock); or (iii) the declaration or payment of a regular quarterly dividend in respect of the Capital Stock of ▇▇▇▇ ▇▇ at a rate not to exceed $0.10 per share. The amount of all Restricted Payments any dividend or other distribution (other than cash) will shall be equal at least to the "fair market value on the date of the Restricted Payment value" of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to such dividend or other distribution. For purposes of this Section 4.06, "fair market value" shall mean, with respect to any asset, the Restricted Payment. The price which could be negotiated in an arm's-length free market transaction, for cash, between a willing seller and a willing buyer, neither of which is under pressure or compulsion to complete the transaction; provided, however, that the fair market value of any asset or assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, any such Subsidiary shall be determined by the Board of Directors of the Company, whose determination acting in good faith. ▇▇▇▇ ▇▇ shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee within 60 days after the end of each of ▇▇▇▇ IV's fiscal quarters (90 days after the end of ▇▇▇▇ IV's last fiscal quarter of each year) in which a Restricted Payment is made under the first paragraph of this Section 4.06, an Officers’ ' Certificate setting forth each Restricted Payment made in such fiscal quarter, stating that each such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 4.06 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to which calculations may be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07based on ▇▇▇▇ IV's latest available internal financial statements.
Appears in 2 contracts
Sources: Indenture (Mark Iv Industries Inc), Indenture (Mark Iv Industries Inc)
Limitation on Restricted Payments. The (a) the Company will not, and will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly:indirectly (the payments and other actions described in the following clauses of this Section 4.06(a) being collectively called “Restricted Payments”):
(1i) declare or pay any dividend or make any other payment or distribution on account of its Equity Interests (other than dividends or distributions paid in the Company’s or any of its Restricted Subsidiaries’ Qualified Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which Interests) held by Persons other than the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct Restricted Subsidiary held by Persons other than the Company or indirect parent any of the Companyits Restricted Subsidiaries;
(3iii) make any principal payment on or with respect to, or purchaserepay, redeem, repurchase, defease or otherwise acquire or retire for value value, or make any Indebtedness that is subordinated payment on or with respect to Subordinated Debt (other than among the Notes Company and any of its Restricted Subsidiaries or the any Restricted Subsidiary Guarantees prior to and any scheduled repayment or scheduled maturity, other Restricted Subsidiaries) except a payment, purchase, redemption, defeasance or other acquisition payments of any such Indebtedness in anticipation of satisfying a sinking fund obligation, interest and principal installment or the at Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionMaturity; or
(4iv) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), than a Permitted Investment; unless, at the time of of, and after giving effect to such to, the proposed Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;,
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur period could Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Debt under Section 4.09; 4.05(a), and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made expended by the Company and its Restricted Subsidiaries for all Restricted Payments made after May 11March 26, 2004 would not, subject to paragraph (excluding Restricted Payments permitted by clauses (2c), (3), (4), (6), (7) and (8) of exceed the next succeeding paragraph), is less than the sum, without duplication, sum of:
(aA) 50% of the aggregate amount of the Consolidated Net Income (or, if the Consolidated Net Income is a loss, minus 100% of the Company for amount of the period (loss) accrued on a cumulative basis during the period, taken as one accounting period) from April 1, 2004 to beginning on the end first day of the fiscal quarter in which the Issue Date occurs and ending on the last day of the Company’s most recently ended completed fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), available; plus
(bB) 100% of subject to paragraph (c), the aggregate net cash proceeds received by the Company (other than from a Subsidiary) after the Issue Date:
(i) from the issuance and sale of its Qualified Equity Interests, including the fair market value by way of any Additional Assets issuance of its Disqualified Equity Interests or Debt to the extent acquired in consideration of since converted into Qualified Equity Interests of the Company (other than Disqualified Stockbut excluding any Qualified Equity Interests to the extent issued in or in connection with the proposed exchange offer or offering described in the Form S-4), provided that amounts received by Parents as payments of the applicable exercise price of any warrants or options issued in connection with the proposed exchange offer shall be included, or
(ii) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), equity; plus
(cC) an amount equal to the extent that any Restricted Investment that was made after May 11sum, 2004 is sold for cash or otherwise liquidated or repaid for cashall Unrestricted Subsidiaries, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibitfollowing:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.
Appears in 2 contracts
Sources: Indenture (Foster Wheeler Inc), Indenture (Foster Wheeler LTD)
Limitation on Restricted Payments. The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare , declare, order, pay, make or pay set apart any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire sum for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at Payment; provided that the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, offoregoing shall not prohibit:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 Restricted Payments made to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange forGuarantor, or out of the net cash proceeds of the substantially concurrent sale (other than to by any Subsidiary that is not a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with Guarantor on a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company pro rata basis to the holders of its Equity Interests on a pro rata basisCapital Stock;
(5b) the repurchase of Capital Stock of the Company deemed to occur upon the exercise of options or warrants to the extent that such Capital Stock represents all or a portion of the exercise price;
(c) Restricted Payments constituting the repurchase of Capital Stock of the Company or, after the Conversion, the Parent, constituting fractional shares, in an aggregate amount not exceeding $100,000 per Fiscal Year;
(d) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests Capital Stock of the Company or any Restricted Subsidiary of or, after the Company Conversion, the Parent, held by any current or former directoremployee, officer, employee consultant or consultant director of the Company or, after the Conversion, the Parent, or any of its Restricted Subsidiaries pursuant to the terms of any employee equity subscription agreement or planagreement, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests approved by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness a majority of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% disinterested members of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than or, after the Conversion, the Parent, in an aggregate amount not exceeding $500,000 per Fiscal Year;
(e) Restricted Payments, to holders of Capital Stock of the Company prior to the Conversion Date, in an aggregate amount not to exceed 40% of the taxable income allocable to such Holders solely with respect to their ownership interest in the Company for the period from January 1, 2006 to the Conversion Date and otherwise in accordance with the terms of the Company LLC Agreement as in effect on the date of making any hereof, and other Restricted Payment (excluding any Restricted Payment described in the preceding clause (2)Payments, (3)if any, (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations holders required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant under the terms of the Company LLC Agreement as in effect on the date hereof; and
(f) after the Conversion Date, Restricted Payments to the first paragraph Parent in an amount not to exceed the amount required by the Parent to pay any consolidated, combined or unitary Taxes of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in and/or any of its sole discretion) such Subsidiaries that are due and payable within 10 days of the Restricted Payment in any manner that complies with this Section 4.07Payment.
Appears in 2 contracts
Sources: Purchase Agreement (NextWave Wireless LLC), Purchase Agreement (NextWave Wireless LLC)
Limitation on Restricted Payments. The Company Borrower will not, and will not permit any of its the Restricted Subsidiaries to, declare, pay or make, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, ofexcept:
(a) 50% the Borrower may declare and pay dividends with respect to its Capital Stock payable solely in additional shares of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plusits common stock;
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets Restricted Subsidiaries may declare and pay dividends ratably with respect to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified their Capital Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus;
(c) the Borrower may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for management, employees or independent consultants of the extent that any Borrower and the Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plusSubsidiaries;
(d) the Borrower may make Restricted Payments to pay for the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests Capital Stock of the Company Borrower or any direct or indirect Parent Entity or management investment vehicle held by any future, present or former employee, director, manager or consultant of the Borrower or any of its Subsidiaries, or their estates, descendants, family, spouse or former spouse pursuant to any management equity plan or stock option or phantom equity plan or any other management or employee benefit plan or agreement, or any stock subscription or shareholder agreement; provided that, that (x) to the extent such Restricted Payments are required under any Franchise Agreement, there shall not be any limit on such redemption and payments, and (y) the aggregate Restricted Payments made under this clause (d) subsequent to the Closing Date (other than any Restricted Payments made pursuant to any Franchise Agreement) do not exceed $2,500,000 in any calendar year (provided that any such amount unused in a calendar year may be carried forward and made in any subsequent calendar year; provided further that the aggregate amount of Restricted Payments made under this clause (d), together with any amounts carried forward from the prior year, do not exceed $3,500,000 in any calendar year);
(e) the Borrower may purchase, redeem or otherwise acquire Capital Stock issued by it with the proceeds received from the substantially concurrent issuance of its Capital Stock;
(f) the Borrower may repurchase fractional shares of its Capital Stock arising out of stock dividends, splits or combinations, business combinations or conversions of convertible securities;
(g) the Borrower or any Subsidiary may receive or accept the return to the Borrower or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant Capital Stock of the Company Borrower or any Subsidiary constituting a portion of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate purchase price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million consideration in any twelve-month periodsettlement of indemnification claims;
(6h) the acquisition of Equity Interests by the Company in connection with the exercise of stock options Borrower or stock appreciation rights by way of cashless exerciseany Subsidiary may make payments or distributions to dissenting stockholders pursuant to applicable law;
(7i) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary so long as (ax) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount result therefrom at the time of all declaration thereof and (y) with respect to Restricted Payments made in reliance on clauses (a) and/or (b) of the definition of “Available Amount” only, after giving effect thereto on a Pro Forma Basis, the Consolidated Total Leverage Ratio is not greater than 4.00:1.00, the Borrower or any Restricted Subsidiary may make Restricted Payments in an amount not to exceed the Available Amount;
(j) the distribution, by dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to the Borrower or a Restricted Subsidiary by, Unrestricted Subsidiaries (other than cashUnrestricted Subsidiaries, the primary assets of which are cash and/or Cash Equivalents);
(k) will [reserved];
(l) so long as no Event of Default shall have occurred and be continuing at the fair market value time of declaration thereof, the Borrower or any Restricted Subsidiary may make additional Restricted Payments so long as, after giving effect thereto on a Pro Forma Basis, the date Consolidated Total Leverage Ratio is not greater than 2.50:1.00;
(i) payments made or expected to be made by the Borrower or any Restricted Subsidiary in respect of withholding or similar taxes payable upon exercise of Capital Stock by any future, present or former employee, director, manager, or consultant and repurchases of Capital Stock deemed to occur upon exercise of stock options or warrants if such Capital Stock represent a portion of the exercise price of such options or warrants and (ii) payments or other adjustments to outstanding Capital Stock in accordance with any management equity plan, stock option plan or any other similar employee benefit plan, agreement or arrangement in connection with any Restricted Payment Payment; and
(n) the Borrower or any Restricted Subsidiary may purchase the Capital Stock of the asset(s) any Restricted Subsidiary or securities proposed to be transferred or issued by the Company or such any other Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07covenant, in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1a) through (9), or is entitled to be made pursuant to the first paragraph n) of this Section 4.0710.5, the Company Borrower will be permitted entitled to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion(based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) among such clauses (a) through (n), in any a manner that otherwise complies with this Section 4.07covenant.
Appears in 2 contracts
Sources: Credit Agreement (Del Frisco's Restaurant Group, Inc.), Credit Agreement (Del Frisco's Restaurant Group, Inc.)
Limitation on Restricted Payments. (a) The Company will not, and will not permit any of its Restricted Subsidiaries toSubsidiary, directly or indirectly:
(1) declare or pay any dividend or , to make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus.
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions provision will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or Restricted Payment made out of the net cash proceeds Net Cash Proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests or made by exchange for, Capital Stock of the Company (other than Disqualified Stock), with Stock and other than Capital Stock issued or sold to a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness Subsidiary of the Company or any Guarantor with the net cash proceeds from an incurrence of, employee stock ownership plan or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution to a trust established by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement for the benefit of their employees) or plan, stock option agreement or similar agreement or plan; provided that a substantially concurrent cash capital contribution received by the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month periodCompany from its shareholders;
(62) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness Subordinated Obligations of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% Guarantor made by exchange for, or out of the principal amount thereof (plus accrued and unpaid interest) in proceeds of the event of a Change of Control in accordance with provisions similar substantially concurrent sale of, Indebtedness which is permitted to be Incurred pursuant to Section 4.15 or 4.03;
(b3) at a purchase price not greater than 100.0% of so long as no Default has occurred and is continuing, the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance redemption or other acquisition or retirementretirement for value of Capital Stock of the Company held by officers, directors, employees or consultants or former officers, directors, employees or consultants (or their estates or beneficiaries) (excluding, in each case, the Company has made the Change of Control Offer or Asset Sale OfferManager, as applicable, as provided in such covenants other than with respect to the Notes and has completed Manager’s net exercise of options under the repurchase Management Incentive Plan, which shall be permitted), upon death, disability, retirement, severance or redemption termination of all Notes validly tendered for payment employment or other service relationship, or in connection with order to satisfy tax withholding obligations of such Change persons upon the exercise of Control Offer options or Asset Sale Offer;
the vesting of performance shares, or pursuant to any agreement under which such Capital Stock was issued (8) the payment of cash in lieu of fractional shares including, without limitation, repurchases of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 millionthe Management Incentive Plan); provided, however, that at the time ofaggregate consideration paid therefor does not exceed an aggregate amount of $1,000,000;
(4) payments made by the Company as a result of dissenters’ rights related to a merger involving the Company; provided, however, that as a result of such merger the Company has made a Change of Control offer under Section 4.10 to the extent required by, and after giving effect toin accordance with, the provisions of such covenant and any Notes tendered in connection therewith have been purchased;
(5) the payment of fees, expenses and indemnities to the Manager pursuant to the Management Agreement, so long as no Event of Default would result therefrom; and
(6) Dividends and distributions by the Company on its Capital Stock subsequent to the Issue Date in an aggregate amount not to exceed $30,000,000. Notwithstanding the foregoing, (i) no Restricted Payment permitted under the preceding clause (9), no Default or shall be made if an Event of Default shall have occurred and be is continuing or would be caused thereby. The amount of all Restricted Payments (other than cashpursuant to clause (5) above) and (ii) the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms will not be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed deemed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the a Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.
Appears in 2 contracts
Sources: Indenture (Wolverine Tube Inc), Indenture (Wt Holding Company, Inc)
Limitation on Restricted Payments. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of or redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.
Appears in 2 contracts
Sources: Third Supplemental Indenture (Whiting Petroleum Corp), First Supplemental Indenture (Whiting Petroleum Corp)
Limitation on Restricted Payments. (a) The Company will not, and will not permit any of its Restricted Subsidiaries toSubsidiaries, directly or indirectly, to take any of the following actions:
(1i) declare or pay any dividend or make any other payment or distribution on account of the Company’s 's or any of its Restricted Subsidiaries’ ' Equity Interests (includingInterests, without limitation, including any payment dividend or distribution payable in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than (A) dividends or distributions by the Company payable in Equity Interests (other than Disqualified Stock) of the Company or (B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable to on or in respect of any class or series of securities issued by a Subsidiary other than a Wholly Owned Subsidiary, the Company or a Restricted Subsidiary receives at least its pro rata share of the Companysuch dividend or distribution in accordance with its Equity Interests in such class or series of securities);
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to Equity Interests of the Notes Company;
(iii) make any principal payment on, or the Subsidiary Guarantees redeem, repurchase, defease or otherwise acquire or retire for value in each case, prior to any scheduled repayment repayment, or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionSubordinated Indebtedness; or
(4iv) make any Restricted Investment (all such payments and other actions set forth in these clauses (1i) through (4iv) above being collectively referred to as “"Restricted Payments”"), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has shall have occurred and is be continuing or would occur as a consequence of such Restricted Paymentthereof;
(2) immediately before and immediately after giving effect to such transaction on a pro forma basis, the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first under paragraph (a) of Section 4.091010; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 the Issuance Date (excluding including Restricted Payments permitted by clauses (2i), (3ii) (with respect to the payment of dividends on Refunding Capital Stock pursuant to clause (b) thereof), (4iv) (only to the extent that amounts paid pursuant to such clause are greater than amounts that would have been paid pursuant to such clause if $5 million and $10 million were substituted in such clause for $10 million and $20 million, respectively), (6v), (7viii) and (8) ix) of the next succeeding paragraph, but excluding all other Restricted Payments permitted by the next succeeding paragraph), is less than the sum, without duplication, sum of:
(aA) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 the fiscal quarter that first begins after the Issuance Date to the end of the Company’s 's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if in the case such Consolidated Net Income for such period is a deficit, less minus 100% of such deficit); provided, however, that for the purposes of this clause (A), Consolidated Net Income shall be deemed to include any increases during such period to Consolidated Additional Paid-In Capital of the Company, which increases are attributable to tax benefits from net operating losses incurred prior to the Issuance Date and are not otherwise included in Consolidated Net Income of the Company for such period, plus
(bB) 100% of the aggregate net cash proceeds and the fair market value, as determined in good faith by the Board of Directors, of marketable securities received by the Company (including since immediately after the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests closing of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or Merger and the Financings from the issue or sale of Equity Interests (including Retired Capital Stock (as defined below), but excluding cash proceeds and marketable securities received from the sale of Equity Interests to members of management, directors or consultants of the Company and its Subsidiaries after the Issuance Date to the extent such amounts have been applied to Restricted Payments in accordance with clause (other than Disqualified Stockiv) of the next succeeding paragraph) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests of the Company (other than Refunding Capital Stock (as defined below) or Equity Interests (or convertible debt securities of the Company sold to a Restricted Subsidiary and other than Disqualified Stock or debt securities) sold to a Subsidiary of the Companysecurities that have been converted into Disqualified Stock), plus
(cC) 100% of the aggregate amount of cash and marketable securities contributed to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, capital of the lesser of (i) Company following the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted InvestmentIssuance Date, plus
(dD) to the extent that any Unrestricted Subsidiary 100% of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) aggregate amount received in cash and the fair market value of marketable securities (other than Restricted Investments) received from (A) the Company’s sale or other disposition (other than to the Company or a Restricted Subsidiary) of Restricted Investments made by the Company and its Restricted Subsidiaries or (B) a dividend from, or the sale (other than to the Company or a Restricted Subsidiary) of the stock of, an Unrestricted Subsidiary (other than an Unrestricted Subsidiary the Investment in such which was made by the Company or a Restricted Subsidiary as of the date of such redesignation pursuant to clauses (vi) or (iix) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. below).
(b) The preceding foregoing provisions will not prohibit:
(1i) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may bethereof, if the dividend, distribution or redemption payment on at the date of declaration or the date of the notice of redemption, as the case may be, such payment would have complied with the provisions of the Indenture;
(2A) the redemption, repurchase, retirement, defeasance retirement or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests (the "Retired Capital Stock") or Subordinated Indebtedness of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the CompanyRestricted Subsidiary) of, Equity Interests of the Company (other than any Disqualified Stock) (the "Refunding Capital Stock"), with and (B) if immediately prior to the retirement of Retired Capital Stock, the declaration and payment of dividends thereon was permitted under clause (v) of this paragraph, the declaration and payment of dividends on the Refunding Capital Stock in an aggregate amount per year no greater than the aggregate amount of dividends per annum that was declarable and payable on such Retired Capital Stock immediately prior to such retirement; provided, however, that at the time of the declaration of any such dividends, no Default or Event of Default shall have occurred and be continuing or would occur as a sale being deemed consequence thereof;
(iii) the redemption, repurchase or other acquisition or retirement of Subordinated Indebtedness of the Company made by exchange for, or out of the proceeds of the substantially concurrent if sale of, new Indebtedness of the Company so long as (A) the principal amount of such redemptionnew Indebtedness does not exceed the principal amount of the Subordinated Indebtedness being so redeemed, repurchaserepurchased, retirement, defeasance acquired or acquisition occurs not more than 120 days after such sale; provided that retired for value (plus the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will premium required to be excluded from clause (3)(b) paid under the terms of the preceding paragraphinstrument governing the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired), (B) such Indebtedness is subordinated to the Senior Indebtedness and the Notes at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, acquired or retired for value, (C) such Indebtedness has a final scheduled maturity date equal to or later than the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and (D) such Indebtedness has a Weighted Average Life to Maturity equal to or greater than the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired;
(3iv) a Restricted Payment to pay for the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any common Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current future, present or former directoremployee, officer, employee director or consultant of the Company or any Subsidiary pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement; provided, however, that the aggregate Restricted Payments made under this clause (iv) does not exceed in any calendar year $10 million (with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum (without giving effect to the following proviso) of $20 million in any calendar year); provided further that such amount in any calendar year may be increased by an amount not to exceed (A) the cash proceeds from the sale of Equity Interests of the Company to members of management, directors or consultants of the Company and its Subsidiaries that occurs after the Issuance Date (to the extent the cash proceeds from the sale of such Equity Interest have not otherwise been applied to the payment of Restricted Payments by virtue of the preceding subclause (a)(3)) plus (B) the cash proceeds of key man life insurance policies received by the Company and its Restricted Subsidiaries after the Issuance Date less (C) the amount of any Restricted Payments previously made pursuant to clauses (A) and (B) of this subparagraph (iv); and provided further that cancellation of Indebtedness owing to the Company from members of management of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired in connection with a repurchase of Equity Interests may of the Company will not exceed $2.0 million in be deemed to 101 constitute a Restricted Payment for purposes of this Section 1009 or any twelve-month periodother provision hereof;
(6v) the acquisition declaration and payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Issuance Date (including, without limitation, the declaration and payment of dividends on Refunding Capital Stock in excess of the dividends declarable and payable thereon pursuant to clause (ii)); provided, however, that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock, after giving effect to such issuance on a pro forma basis, the Company and its Restricted Subsidiaries would have had a Fixed Charge Coverage Ratio of at least 1.75 to 1.00;
(vi) Investments in Unrestricted Subsidiaries having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (vi) that are at that time outstanding, not to exceed $20 million at the time of such Investment (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);
(vii) repurchases of Equity Interests deemed to occur upon exercise of stock options if such Equity Interests represent a portion of the exercise price of such options;
(viii) the payment of dividends on the Company's Common Stock, following the first public offering of the Company's Common Stock after the Issuance Date, of up to 6% per annum of the net proceeds received by the Company in connection such public offering, other than public offerings with respect to the exercise of stock options or stock appreciation rights by way of cashless exerciseCompany's Common Stock registered on Form S-8;
(7ix) a Restricted Payment to pay for the purchase, repurchase, redemption, defeasance retirement or other acquisition or retirement for value of subordinated Indebtedness Equity Interests of the Company in existence on the Issuance Date and which are not held by KKR or any of their Affiliates or the Management Group on the Issuance Date (including any Equity Interests issued in respect of such Equity Interests as a result of a stock split, recapitalization, merger, combination, consolidation or otherwise, but excluding any management equity plan or stock option plan or similar agreement), provided that the aggregate Restricted Subsidiary Payments made under this clause (ix) shall not exceed $30 million, provided further that notwithstanding the foregoing proviso, the Company shall be permitted to make Restricted Payments under this clause (ix) only if after giving effect thereto, the Company would be permitted to incur at least $1.00 of additional Indebtedness under paragraph (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.101010; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;and
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9x) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 20 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause clauses (9iii), (iv), (v), (vi), (vii), (viii), (ix) and (x), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The occur as a consequence thereof; and provided further that for purposes of determining the aggregate amount of all expended for Restricted Payments in accordance with subclause (other than casha)(3) will be the fair market value on the date of the Restricted Payment immediately preceding paragraph, only the amounts expended under clauses (i), (ii) (with respect to the payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, dividends on Refunding Capital Stock pursuant to clause (b) thereof), (iv) (only to the Restricted Payment. The fair market value of any assets or securities extent that amounts paid pursuant to such clause are required greater than amounts that would have been paid pursuant to be valued by this covenant will be determined, such clause if $5 million and $10 million were substituted in the case of amounts under such clause for $50.0 10 million and $20 million, by an officer of the Company andrespectively), in the case of amounts of $50.0 million or more(v), by the Board of Directors of the Company, whose determination (viii) and (ix) shall be evidenced by a Board Resolution. included.
(c) Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2)Payment, (3), (4), (6), (7) or (8)) the Company will shall deliver to the Trustee an Officers’ ' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 1009 were computed, which calculations may be based upon the Company's latest available financial statements. The Trustee shall have no duty to recompute or recalculate or verify the accuracy of the information set forth in such Officers' Certificate.
(d) As of the Issuance Date, all of the Company's Subsidiaries will be Restricted Subsidiaries. The Company will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the second to last sentence of the definition of "Unrestricted Subsidiary." For purposes of determining compliance with this Section 4.07designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid) in the event that Subsidiary so designated will be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of "Investments." Such designation will only be permitted if a Restricted Payment in such amount would be permitted at such time and if such Subsidiary otherwise meets the criteria definition of more than one an Unrestricted Subsidiary. Unrestricted Subsidiaries will not be subject to any of the categories of Restricted Payments described restrictive covenants set forth in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Indenture.
Appears in 2 contracts
Sources: Indenture (KCLC Acquisition Corp), Indenture (Kindercare Learning Centers Inc /De)
Limitation on Restricted Payments. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) Qualified Capital Stock of the Company or and dividends and distributions payable to the Company or a another Restricted Subsidiary of the Company)) on or in respect of shares of Capital Stock of the Company or its Restricted Subsidiaries to holders of such Capital Stock;
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or its Restricted Subsidiaries (other than any direct such Capital Stock held by the Company or indirect parent of the Companyany Restricted Subsidiary);
(3) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value value, prior to any scheduled final maturity, scheduled repayment or scheduled sinking fund payment, any Indebtedness of the Company or any Guarantor, if any, that is subordinated subordinate or junior in right of payment to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionGuarantee; or
(4) make any Restricted Investment (all such payments and other than Permitted Investments); (each of the foregoing actions set forth in these clauses (1), (2), (3) through and (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such a "Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, "); if at the time of such Restricted Payment and or immediately after giving pro forma effect thereto as if such Restricted Payment had been made at thereto:
(i) a Default or an Event of Default shall have occurred and be continuing;
(ii) the beginning of the applicable four-quarter period, have been permitted Company is not able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth (other than Permitted Indebtedness) in the first paragraph of compliance with Section 4.094.08; andor
(3iii) such Restricted Payment, together with the aggregate amount of all other Restricted Payments (including such proposed Restricted Payment) made by subsequent to the Company and its Restricted Subsidiaries after May 11Issue Date (the amount expended for such purposes, 2004 (excluding Restricted Payments permitted by clauses (2)if other than in cash, (3), (4), (6), (7) and (8) being the Fair Market Value of such property at the time of the next succeeding paragraph), is less than making thereof) shall exceed the sum, without duplication, sum of:
(aA) 50% of the cumulative Consolidated Net Income (or if cumulative Consolidated Net Income is a loss, minus 100% of such loss) of the Company for earned during the period (taken as one accounting period) from April 1, 2004 to beginning on the end first day of the first completed fiscal quarter of the Company after the Issue Date and ending on the last day of the Company’s 's most recently ended recent fiscal quarter ending prior to the date the Restricted Payment occurs for which internal financial statements are available at (the time of such Restricted Payment "Reference Date") (or, if such Consolidated Net Income for treating such period is as a deficit, less 100% of such deficitsingle accounting period), ; plus
(bB) 100% of the aggregate net cash proceeds received by the Company from any Person (including other than a Subsidiary of the fair market value Company) from the issuance and sale subsequent to the Issue Date and on or prior to the Reference Date of Qualified Capital Stock of the Company or options or warrants to acquire the same (excluding any Additional Assets net proceeds from an Equity Offering to the extent acquired in consideration of Equity Interests used to redeem Notes pursuant to the provisions described under Paragraph 6 of the Notes); plus
(C) without duplication of any amounts included in clause (iii)(B) above, 100% of the aggregate net cash proceeds of any equity contribution received by the Company from a holder of the Company's Capital Stock subsequent to the Issue Date and on or prior to the Reference Date (excluding any net proceeds from an Equity Offering to the extent used to redeem Notes pursuant to the provisions described under Paragraph 6 of the Notes; plus
(D) 100% of the aggregate net cash proceeds received from the issuance (other than Disqualified Stock)) since May 11, 2004 as to a contribution to its common equity capital or from the issue or sale of Equity Interests Subsidiary of the Company (other than Company) of Indebtedness or shares of Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Capital Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests Qualified Capital Stock of the Company subsequent to the Issue Date and on or prior to the Reference Date; plus
(E) the sum of (1) without duplication of any amounts included in Consolidated Net Income in clause (iii)(A) above, the aggregate amount paid in cash or Cash Equivalents to the Company or a Restricted Subsidiary of the Company on or with respect to Investments (other than Equity Interests Permitted Investments) made subsequent to the Issue Date whether through interest payments, principal payments, dividends or other distributions or payments, (2) the net cash proceeds received by the Company or Disqualified Stock any of its Restricted Subsidiaries from the disposition of all or debt securities) sold any portion of such Investments (other than to the Company or a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii3) the initial amount upon redesignation of such Restricted Investment, plus
(d) to the extent that any an Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004Subsidiary, the lesser product of (ix) the fair market value of such Subsidiary and (y) the percentage of the Capital Stock of such Unrestricted Subsidiary that is held by the Company or any of its Restricted Subsidiaries; provided, however, that the sum of clauses (1), (2) and (3) above shall not exceed the aggregate amount of all such Investments made subsequent to the Issue Date. In the case of clauses (iii)(B) and (C) above, any net cash proceeds from issuances and sales of Qualified Capital Stock of the Company financed directly or indirectly using funds borrowed from the Company or any Subsidiary of the Company’s Investment , shall be excluded until and to the extent such borrowing is repaid.
(b) Notwithstanding the foregoing, the provisions set forth in such Subsidiary as clause (a) of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will this Section 4.09 do not prohibit:
(1) the payment of any dividend or other distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of call for redemption, as the case may be, if the dividend, distribution such dividend or redemption payment would have been permitted on the date of declaration or the date of the notice of call for redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount exist after giving effect thereto, the acquisition of all Restricted Payments any shares of Qualified Capital Stock of the Company, either (i) solely in exchange for other shares of Qualified Capital Stock of the Company or (ii) through the application of net proceeds of a sale for cash (other than cash) will be the fair market value on the date to a Subsidiary of the Restricted Payment Company) of shares of Qualified Capital Stock of the asset(sCompany within 60 days after such sale;
(3) or securities proposed to be transferred or issued by the acquisition of any Indebtedness of the Company or the Guarantors that is subordinate or junior in right of payment to the Notes and Guarantees either (i) solely in exchange for shares of Qualified Capital Stock of the Company, or (ii) if no Default or Event of Default shall have occurred and be continuing or would exist after giving effect thereto, through the application of net proceeds of a sale for cash (other than to a Subsidiary of the Company) within 60 days after such Restricted Subsidiarysale of (a) shares of Qualified Capital Stock of the Company or (b) Refinancing Indebtedness;
(4) an Investment either (i) solely in exchange for shares of Qualified Capital Stock of the Company or (ii) through the application of the net proceeds of a sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company within 60 days after such sale;
(5) if no Default or Event of Default has occurred and is continuing or would exist after giving effect thereto, as the case may berepurchase or other acquisition of shares of Capital Stock of the Company from employees, former employees, directors or former directors of the Company (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer terms of the Company and, in the case of amounts of $50.0 million agreements (including employment agreements) or more, plans (or amendments thereto) approved by the Board of Directors of the Company under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such Capital Stock; provided, however, that the aggregate amount of such repurchases and other acquisitions in any calendar year shall not exceed the sum of (x) $1,000,000 and (y) the aggregate amount of Restricted Payments permitted (but not made) pursuant to this clause (5) in the immediately preceding calendar year;
(6) repurchases of Capital Stock deemed to occur upon exercise of stock options, warrants or other similar rights if such Capital Stock represents a portion of the exercise price of such options, warrants or other similar rights;
(7) payments or distributions to dissenting stockholders of Capital Stock of the Company pursuant to applicable law, pursuant to or in connection with a consolidation, merger or transfer of assets that complies with the provisions of this Indenture applicable to mergers, consolidations and transfers of all or substantially all of the property and assets of the Company or any of its Restricted Subsidiaries;
(8) the application of the proceeds from the issuance of the Notes on the Issue Date as described under the "Use of Proceeds" section of the Company's Offering Circular, whose determination dated June 17, 2004;
(9) if no Default or Event of Default shall have occurred and be continuing or would exist after giving effect thereto, payments on, purchases, defeasances, redemptions and prepayments of, and decreases and other acquisitions and retirement for value of, any of the 8% Senior Notes so long as the aggregate amount of consideration for any such 8% Senior Notes purchased, defeased, redeemed, prepaid or otherwise acquired or retired does not exceed 90% of the outstanding principal amount thereof, plus accrued and unpaid interest thereon;
(10) if no Default or Event of Default shall have occurred and be continuing or would exist after giving effect thereto, purchases, redemptions or other acquisitions or retirements for value of any Capital Stock of the Company concurrently with or after any merger of the Company with any other Person that is not a Subsidiary of the Company in accordance with the terms of Section 5.01; provided, however, that (i) if the consideration paid or payable for such Capital Stock consists solely of Merger Proceeds (as defined below), or the aggregate consideration paid or payable for such Capital Stock so purchased, redeemed or otherwise acquired or retired for value shall not exceed the sum of (x) the aggregate Net Cash Proceeds received by such other Person from the issuance by such other Person of its Qualified Capital Stock and (y) the aggregate amount of capital contributions received by such other Person in cash (together with such Net Cash Proceeds, "Merger Proceeds"), in each case, concurrently with such merger, and (ii) if the consideration paid or payable for such Capital Stock does not consist solely of Merger Proceeds, immediately after giving effect thereto (including any other transactions related thereto), the Consolidated Leverage Ratio of the Company must be 0.5 times lower on a pro forma basis than the Consolidated Leverage Ratio of the Company immediately before the occurrence of such merger; provided further, however, that if a Change of Control shall have resulted in connection with such purchase, redemption or other acquisition or retirement for value or merger, no such purchase, redemption or other acquisition or retirement for value may be made until the Change of Control Offer related thereto shall have been consummated by the Company in accordance with the terms of Section 4.25; and
(11) if no Default or Event of Default shall have occurred and be continuing or would exist after giving effect thereto, other Restricted Payments not to exceed $5.0 million outstanding in the aggregate since the Issue Date. In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date in accordance with clause (iii) of the first paragraph of this Section 4.09(a) amounts expended pursuant to clauses (1), (2)(ii), 3(ii)(a), (4)(ii), (5), (7) and (11) of clause (b) of this Section 4.09 shall be evidenced by a Board Resolution. included in such calculation.
(c) Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2)Payment, (3), (4), (6), (7) or (8)) the Company will shall deliver to the Trustee an Officers’ ' Certificate stating that each such Restricted Payment is permitted complies with this Indenture and setting forth in reasonable detail the basis upon which the required calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in which calculations may be based upon the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Company's latest available internal quarterly financial statements.
Appears in 2 contracts
Sources: Indenture (Viskase Companies Inc), Indenture (Viskase Companies Inc)
Limitation on Restricted Payments. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:, take any of the following actions (each, a "Restricted Payment"):
(1) declare or pay any dividend or return of capital or make any other payment or distribution on account or in respect of the Company’s or any shares of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which Capital Stock of the Company or any of its Restricted Subsidiaries is a party) or Subsidiary to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Capital Stock, other than:
(other than i) dividends or distributions payable in Equity Interests (other than Disqualified Stock) Qualified Capital Stock of the Company Company, or
(ii) dividends or distributions payable to the Company or and/or a Restricted Subsidiary of the Company)Subsidiary;
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any Restricted Subsidiary, or any direct or indirect parent of the Company, other than Capital Stock held by the Company or another Restricted Subsidiary;
(3) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled final maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchaseas the case may be, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionSubordinated Indebtedness; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”than Permitted Investments), unless, ; if at the time of the Restricted Payment and immediately after giving effect to such Restricted Paymentthereto:
(1A) no a Default or an Event of Default has shall have occurred and is continuing or would occur as a consequence of such Restricted Paymentbe continuing;
(2B) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted is not able to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.093.9(a); andor
(3C) such the aggregate amount (the amount expended for these purposes, if other than in cash, being the Fair Market Value of the relevant property) of Restricted Payments, including the proposed Restricted Payment, together with made subsequent to the aggregate amount of all other Restricted Payments made by Issue Date up to the Company and its Restricted Subsidiaries after May 11date thereof, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) less any Investment Return calculated as of the next succeeding paragraph)date thereof, is less than shall exceed the sum, without duplication, sum of:
(ai) fifty percent (50% %) of the cumulative Consolidated Net Income or, if cumulative Consolidated Net Income is a loss, minus one hundred percent (100%) of the Company for loss, accrued during the period (taken period, treated as one accounting period) from April 1, 2004 beginning on the first full fiscal quarter after the Issue Date to the end of the Company’s most recently ended recent fiscal quarter for which internal consolidated financial statements are available at information of the time of such Restricted Payment (or, if such Consolidated Net Income for such period Company is a deficit, less 100% of such deficit), available; plus
(bii) one hundred percent (100% %) of the aggregate net cash proceeds received by the Company from any Person from any:
(including the fair market value of any Additional Assets a) contribution to the extent acquired in consideration of Equity Interests equity capital of the Company (other than not representing an interest in Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Capital Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% issuance and sale of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Qualified Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2)each case, (3), (4), (6), (7) or (8)) the Company will deliver subsequent to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07Issue Date, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.or
Appears in 2 contracts
Sources: Indenture (Baron Wire & Cable Corp.), Indenture (CCI International, Inc.)
Limitation on Restricted Payments. The Company will Parent shall not, and will shall not permit any Restricted Subsidiary or, in the case of its Restricted Subsidiaries toparagraphs (3) and (4) below, the Company to take, directly or indirectly, any of the following actions:
(1) declare or pay any dividend on, or make any other payment or distribution on account to holders of, any shares of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders Capital Stock of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Parent (other than dividends or distributions payable solely in Equity Interests (shares of its Qualified Capital Stock or in options, warrants or other than Disqualified rights to acquire such shares of Qualified Capital Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value value, directly or indirectly, any shares of Capital Stock of the Parent or any Capital Stock of any of its Affiliates (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests other than Capital Stock of the Company or any direct Wholly Owned Restricted Subsidiary) or indirect parent any options, warrants or other rights to acquire such shares of the CompanyCapital Stock;
(3) make any principal payment on or with respect toon, or purchaserepurchase, redeem, defease or otherwise acquire or retire for value value, prior to the Stated Maturity of any principal payment or any sinking fund payment, any Indebtedness of the Parent or of the Company that is expressly subordinated in right of payment to the Notes or to the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturityGuarantees, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or as the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitioncase may be; or
(4) make any Restricted Investment (all other than any Permitted Investment) in any Person; (such payments and or other actions set forth described in these (but not excluded from) clauses (1) through (4) above being are collectively referred to as “"Restricted Payments”"), unless, ; unless at the time of of, and immediately after giving effect to to, the proposed Restricted Payment (the amount of any such Restricted Payment:
, if other than cash, as determined by the Board of Directors of the Parent, whose determination shall be conclusive and evidenced by a Board Resolution), (1A) no Default or Event of Default has shall have occurred and is continuing or would occur as a consequence of such Restricted Payment;
be continuing, (2B) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to Parent could incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
1011 and (3C) such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made by after the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of Issue Date shall not exceed the next succeeding paragraph), is less than the sum, without duplication, sum of:
(ai) 50100% of the Consolidated Net Income Operating Cash Flow of the Company for the period (taken as one accounting period) from April 1, 2004 to the end Parent less 1.5 times Consolidated Interest Expense of the Company’s most recently ended fiscal quarter for which internal financial statements are available at Parent or (ii) if Consolidated Operating Cash Flow of the time of such Restricted Payment (or, if such Consolidated Net Income for such period Parent is a deficitnegative, less minus 100% of such deficit)negative amount, in each case on a cumulative basis for the period beginning on the first day of the Parent's first fiscal quarter after the Issue Date and ending on the last day of the Parent's last fiscal quarter ending prior to the date of such proposed Restricted Payment; plus
(bii) 100% of the aggregate net cash proceeds Net Cash Proceeds and the Fair Market Value of Telecommunications Assets or Voting Stock of a Person that becomes a Restricted Subsidiary, the assets of which consist primarily of Telecommunications Assets, received by the Company (including Parent after the fair market value of any Additional Assets to Issue Date as capital contributions or from the extent acquired in consideration of Equity Interests of the Company issuance or sale (other than Disqualified Stock)to any Subsidiary) since May 11of shares of Qualified Capital Stock of the Parent (including upon the exercise of options, 2004 as warrants or rights) or warrants, options or rights to purchase shares of Qualified Capital Stock of the Parent; plus
(iii) the aggregate Net Cash Proceeds and the Fair Market Value of Telecommunications Assets or Voting Stock of a contribution to its common equity capital or Person that becomes a Restricted Subsidiary, the assets of which consist primarily of Telecommunications Assets, received by the Parent after the Issue Date from the issue issuance or sale of Equity Interests of the Company (other than Disqualified Stockto any Subsidiary) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company or Redeemable Capital Stock that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Qualified Capital Stock or debt securities) sold to a Subsidiary of the Company)Parent, together with the aggregate Net Cash Proceeds and the Fair Market Value of Telecommunications Assets or Voting Stock of a Person that becomes a Restricted Subsidiary, the assets of which consist primarily of Telecommunications Assets, received by the Parent at the time of such conversion or exchange; plus
(civ) to the extent that not otherwise included in Consolidated Operating Cash Flow of the Parent, an amount equal to the sum of (a) the net reduction in Investments (other than Permitted Investments) in any Person (other than a Restricted Subsidiary) resulting from the payment in cash of dividends, repayments of loans or advances or other transfers of assets, in each case to the Parent or any Restricted Investment that was made Subsidiary after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of Issue Date from such Person and (ib) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to any net reduction in Investments resulting from the extent that any redesignation of an Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11(valued as provided in the definition of "Investment") at the time of such redesignation; provided that, 2004in the case of (a) or (b) above, the lesser foregoing sum shall not exceed the total amount of Investments (iother than Permitted Investments) the fair market value of the Company’s Investment previously made in such Person or Unrestricted Subsidiary by the Parent and its Restricted Subsidiaries.
(b) Notwithstanding paragraph (a) above, the Parent and any Restricted Subsidiary may take the following actions so long as (with respect to clauses (2) through (6) below) no Default or Event of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibitDefault shall have occurred and be continuing:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration thereof, if at such date of declaration the payment of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of paragraph (a) above and such payment will be deemed to have been paid on such date of declaration for purposes of the Indenturecalculation required by paragraph (a) above;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchasepurchase, redemption or other acquisition or retirement for value of any Equity Interests shares of Capital Stock of the Company Parent (x) in exchange for, or any Restricted Subsidiary out of the Company Net Cash Proceeds of a substantially concurrent issuance and sale (other than to a Subsidiary) of, shares of Qualified Capital Stock of the Parent; or (y) that are held by any current former officers, employees or former director, officer, employee directors (or consultant their estates or beneficiaries under their estates) of the Company Parent or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or planSubsidiaries; provided that the aggregate price paid amount of such purchase, redemption or other acquisition or retirement for all such repurchased, redeemed, acquired or retired Equity Interests may value under this clause (y) will not exceed $2.0 million 250,000 (or the equivalent thereof in one or more foreign currencies) in any twelve-month periodgiven fiscal year;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(73) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of any Indebtedness of the Parent that is expressly subordinated in right of payment to the Notes in exchange for, or out of the Net Cash Proceeds of a substantially concurrent issuance and sale (other than to a Subsidiary) of, shares of Qualified Capital Stock of the Parent;
(4) the purchase of any Indebtedness of the Company that is expressly subordinated in right of payment to the Notes or the purchase of any Restricted Subsidiary (a) Indebtedness of the Parent that is expressly subordinated in right of payment to the Guarantees, in each case at a purchase price not greater than 101.0101% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.101010; provided that, that prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, purchase the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants covenant with respect to the Notes and has completed the repurchase or redemption of purchased all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) 5) the purchase, redemption, defeasance or other acquisition or retirement for value of Indebtedness (other than Redeemable Capital Stock) of the Parent that is expressly subordinated in right of payment to the Notes in exchange for, or out of the Net Cash Proceeds of a substantially concurrent incurrence (other than to a Subsidiary) of, new Indebtedness of the Parent that is expressly subordinated in right of payment to the Notes, so long as (A) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Indebtedness being so purchased, redeemed, defeased, acquired or retired, plus the lesser of (x) the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness being refinanced or (y) the amount of any premium reasonably determined by the Parent as necessary to accomplish such refinancing, plus, in either case, the amount of expenses of the Parent incurred in connection with such refinancing; (B) such new Indebtedness is subordinated to the Notes to the same extent as such Indebtedness so purchased, redeemed, defeased, acquired or retired; and (C) such new Indebtedness has an Average Life longer than the Average Life of the Indebtedness being refinanced and a final Stated Maturity of principal later than the final Stated Maturity of the Indebtedness being refinanced; and
(6) the payment of cash in lieu of fractional shares of Capital Common Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted PaymentWarrant Agreement. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment actions described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph 4) and (6) of this Section 4.07, the Company will paragraph (b) shall be Restricted Payments that shall be permitted to divide or classify in accordance with this paragraph (or later divided or classify or reclassify b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (C) of paragraph (a) above. The actions described in whole or clause (5) of this paragraph (b) shall be Restricted Payments that shall be permitted in part accordance with this paragraph (b) and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (C) of paragraph (a). SECTION 123. AMENDMENT TO SECTION 1013. Section 1013 of the Indenture is hereby amended by deleting the existing Section 1013 in its sole discretion) such Restricted Payment in any manner that complies entirety and replacing it with this Section 4.07.the following:
Appears in 2 contracts
Sources: Supplemental Indenture (Pathnet Telecommunications Inc), Supplemental Indenture (Pathnet Telecommunications Inc)
Limitation on Restricted Payments. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare Declare or pay any dividend on, or make any other payment or distribution on account of of, or set apart assets for a sinking or other analogous fund for, the Company’s purchase, redemption, defeasance, retirement, termination or any of its Restricted Subsidiaries’ Equity Interests (including, without limitationother acquisition of, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct Restricted Subsidiary, whether now or indirect parent hereafter outstanding, or make any other distribution in respect thereof, in each case either directly or indirectly, whether in cash or property or in obligations of the Company or any Restricted Subsidiary (collectively, “Restricted Payments”), except that:
(a) (i) any Restricted Subsidiary may make Restricted Payments to the Company or any Subsidiary Guarantor and (ii) any Restricted Subsidiary that is not a Subsidiary Guarantor may make Restricted Payments to any other Restricted Subsidiary;
(b) the Company may make Restricted Payments in the form of common stock of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2c) the Company wouldmay purchase the Company’s common stock, at common stock options, restricted stock, restricted stock units and similar securities from present or former officers, directors or employees of the time Company or any Restricted Subsidiary upon the death, disability or termination of employment of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter periodofficer, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Paymentdirector or employee, together with provided that the aggregate amount of all other Restricted Payments payments made by the Company and its Restricted Subsidiaries after May 11, 2004 pursuant to this paragraph (excluding Restricted Payments permitted by clauses c) (2), (3), (4), (6), (7) and (8) net of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash any proceeds received by the Company (including the fair market value in connection with resales of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11common stock, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt stock options, restricted stock, restricted stock units and similar securities) sold to a Subsidiary of the Company), plus
(c) to the extent that shall not exceed $10,000,000 during any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plusfiscal year;
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a may make Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment Payments in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied connection with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness any Capital Stock of the Company upon or any Guarantor in connection with the net cash proceeds from an incurrence ofexercise or vesting of warrants, options, restricted stock units or similar rights if such Capital Stock constitutes all or a portion of the exercise price or is surrendered (or deemed surrendered) in exchange for, Permitted Refinancing Indebtednessconnection with satisfying any income tax obligation incurred in connection with such exercise or vesting;
(4e) the Company may make cash payments (i) solely in lieu of the issuance of fractional shares in connection with the exercise of warrants, options, restricted stock units or other securities convertible into or exchangeable for Capital Stock of the Company; provided that any such cash payment shall not be for the purpose of any dividend or distribution by evading the limitations of this Section 7.06 and (ii) to officers, directors, employees and consultants in respect of phantom stock, to the extent considered a Restricted Payment;
(f) any non-wholly owned Restricted Subsidiary of may, to the extent a Restricted Payment is made to the Company or another Restricted Subsidiary under this Section 7.06, make Restricted Payments to the holders of its Equity Interests other shareholders on a pro rata basis;
(5g) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6i) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, so long as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would result therefrom and (ii) the Company shall be caused thereby. The amount of all Restricted Payments (other than cash) will be in compliance with the fair market value on Minimum Liquidity Test at the date time of the proposed Restricted Payment of the asset(s) or securities proposed to be transferred or issued and immediately after giving effect thereto, as certified by the Company to the Administrative Agent (and supported with such evidence as may be reasonably satisfactory to the Administrative Agent), the Company may make Restricted Payments in connection with the redemption, repurchase, retirement or such Restricted Subsidiary, as other acquisition of any Capital Stock of the case may be, Company; provided that the aggregate amount of payments made pursuant to this Section 7.06(g) in any fiscal year shall not exceed the Restricted Payment. The fair market value sum of any assets (x) $25,000,000 and (y) the aggregate amount of cash paid to the Company for its account in such fiscal year upon the exercise or securities that are required to be valued vesting of warrants, options, restricted stock units or similar rights by this covenant will be determinedofficers, in the case of amounts under $50.0 million, by an officer directors or employees of the Company andor its Restricted Subsidiaries in such fiscal year (it being agreed that if any portion of such permitted amount is not used in any fiscal year, then 50% of such unused portion may be used in any subsequent fiscal year and any such carried over amount shall be deemed used first in such subsequent fiscal year);
(h) the Company may make additional cash Restricted Payments pursuant to this clause (h) in an aggregate amount not to exceed the Available Amount at such time (as determined immediately before giving effect to the making of such Restricted Payment) so long as (A) no Default or Event of Default then exists or would result therefrom, (B) the Company would at the time of and immediately after giving effect to such Restricted Payment be in compliance with (i) the Interest Coverage Ratio Covenant and (ii) a Total Net Leverage Ratio of not greater than 2.00 to 1.00, in each case, determined on a Pro Forma Basis giving effect to such Restricted Payment as of the case last day of amounts the most recently ended Test Period and (C) the Company shall be in compliance with the Minimum Liquidity Test at the time of $50.0 million or morethe proposed Restricted Payment and immediately after giving effect thereto, as certified by the Board of Directors Company to the Administrative Agent (and supported with such evidence as may be reasonably satisfactory to the Administrative Agent);
(i) the Company may make Restricted Payments in an amount not to exceed $25,000,000 in any fiscal year; and
(j) the Company may make a Specified Distribution so long as (i) the Company would, immediately after giving effect to such Specified Distribution be in compliance with the Financial Covenants, determined on a Pro Forma Basis giving effect to such Specified Distribution as of the Companylast day of the most recently ended Test Period (and assuming for such purposes the repayment, whose determination shall be evidenced by a Board Resolution. Not later than the date tender, repurchase, redemption, defeasance or discharge of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2Indebtedness repaid, tendered, repurchased, redeemed, defeased or discharged substantially simultaneously with such Specified Distribution), (3)ii) no Default or Event of Default exists or will result therefrom and (iii) substantially simultaneously with such Specified Distribution, (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, all outstanding Term Loans are repaid in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07full.
Appears in 2 contracts
Sources: Credit Agreement (Harsco Corp), Amendment to Credit Agreement (Harsco Corp)
Limitation on Restricted Payments. The (a) Except as otherwise provided in this Section 1009, the Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly:
make any Restricted Payment if (1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such proposed Restricted Payment:
(1) no , a Default or Event of Default has shall have occurred and is be continuing or would shall occur as a consequence of such Restricted Payment;
, (2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter periodthereto, have been permitted to incur prohibited from incurring at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Cash Flow Ratio test set forth in the first paragraph of Section 4.09; and
1007(a) or (3) immediately after giving effect to such Restricted Payment, together with the aggregate of all Restricted Payments that shall have been made since June 30, 2011 would exceed the sum of $100.0 million plus an amount equal to the difference between (i) the Cumulative Cash Flow Credit and (ii) 1.4 multiplied by Cumulative Interest Expense. For purposes of this Section 1009, the amount of all other any Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (orPayment, if such Consolidated Net Income for such period is a deficitother than cash, less 100% of such deficit), plusshall be based upon Fair Market Value.
(b) 100% Clause (a) of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will this Section 1009 shall not prohibitprevent:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may bethereof, if the dividend, distribution or redemption payment on the at such date of declaration or the date of the notice of redemption, as the case may be, would have such payment complied with the provisions clause (a) of the Indenturethis Section 1009;
(2) Permitted Affiliate Payments;
(3) the retirement, redemption, repurchase, retirementpurchase, defeasance or other acquisition of any subordinated Indebtedness shares of the Company Company’s Capital Stock or any Guarantor warrants, rights or of any Equity Interests options to acquire Capital Stock of the Company Company, in exchange for, or out of the net cash proceeds of the substantially concurrent a sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance within one year before or acquisition occurs not more than 120 180 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such retirement, redemption, repurchase, retirementpurchase, defeasance or other acquisition will be excluded from clause (3)(bacquisition) of, other shares of the preceding paragraph;
(3) the defeasanceCompany’s Capital Stock or warrants, redemption, repurchase, retirement rights or other acquisition of subordinated Indebtedness options to acquire Capital Stock of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing IndebtednessCompany;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its common Equity Interests on a pro rata basis;
(5) repurchases of Equity Interests in a cashless transaction deemed to occur upon exercise or vesting of restricted stock, stock options or warrants;
(6) the payment of cash in lieu of the issuance of fractional shares or scrip in connection with the exercise of warrants, options or other securities convertible into or exercisable for Capital Stock of the Company;
(7) the repurchase, redemption retirement or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary Capital Stock of the Company held by any current future, present or former director, officer, employee or consultant director of the Company or any of its Restricted Subsidiaries or the estate, heirs or legatees of, or any entity controlled by, any such employee or director, pursuant to any management equity subscription agreement plan or plan, stock option plan or any other management or employee benefit plan or agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise termination of stock options such person’s employment for any reason (including by reason of death or stock appreciation rights by way of cashless exercise;
disability); provided, however, that the aggregate Restricted Payments made under this clause (7) does not exceed in any calendar year the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value sum of subordinated Indebtedness (A) $1.5 million (with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum (without giving effect to the following proviso) of $5.0 million in any calendar year) and (B) the cash proceeds of key man life insurance policies on the life of any such person received by the Company or any and its Restricted Subsidiary (a) at a purchase price not greater than 101.0% Subsidiaries after the date of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offerthis Indenture;
(8) any Restricted Payment so long as immediately after the payment making of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07such Restricted Payment, the Cash Flow Ratio does not exceed 3.25:1.00; or
(9) other Restricted Payments made in connection with the Transactions. For purposes of determining the aggregate permissible amount of Restricted Payments in an aggregate amount since May 11accordance with clause (3) of Section 1009(a), 2004 not all amounts expended pursuant to exceed $25.0 millionSection 1009(b)(1) shall be included and all amounts expended or received pursuant to Sections 1009(b)(2) through (9) shall be excluded; provided, however, that amounts paid pursuant to Section 1009(b)(1) shall be included only to the extent that such amounts were not previously included in calculating Restricted Payments. If the Company or a Restricted Subsidiary makes a Restricted Payment that at the time ofof the making of such Restricted Payment, and after giving effect to, any Restricted Payment would be in the Company’s good faith determination permitted under the preceding clause (9)requirements of this Section 1009, no Default or Event such Restricted Payment shall be deemed to have been made in compliance with this Section 1009 notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements affecting the calculations set forth above for any period. For the purposes of Default this Section 1009, the net proceeds from the issuance of shares of the Company’s Capital Stock upon conversion of Indebtedness shall have occurred and be continuing or would deemed to be caused thereby. The an amount equal to the accreted value of all Restricted Payments (other than cash) will be the fair market value such Indebtedness on the date of such conversion and the Restricted Payment additional consideration, if any, the Company receives upon such conversion, minus any cash payment on account of the asset(s) or securities proposed fractional shares (such consideration, if in property other than cash, to be transferred or issued determined by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Company’s Board of Directors of the CompanyDirectors, whose good faith determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2conclusive), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.
Appears in 2 contracts
Sources: Indenture (AMC Networks Inc.), Indenture (WE TV Studios LLC)
Limitation on Restricted Payments. The Company IRSA will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:, take any of the following actions (each, a “Restricted Payment”):
(1a) declare or pay any dividend or make any other payment distribution, whether in cash or distribution in kind, on account or in respect of shares of Capital Stock of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation Issuer to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Capital Stock (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) Capital Stock of the Company or payable to the Company or a Restricted Subsidiary of the CompanyIssuer);; or
(2b) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests shares of Capital Stock of the Company or any direct or indirect parent of the Company;
Issuer (3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of than any such Indebtedness in anticipation of satisfying shares held by the Issuer or a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionSubsidiary); or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, unless at the time of the Restricted Payment and immediately after giving effect to such Restricted Paymentthereto:
(1) no Default or Event of Default has shall have occurred and is continuing or would occur as a consequence of such Restricted Payment;be continuing; and
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted IRSA is able to incur Incur at least $US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph clause (1) of Section 4.09; and
(3) such Restricted Payment3.16. Notwithstanding the preceding paragraph, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will this covenant does not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 sixty (60) days after the date of declaration of such dividend or the delivery of any irrevocable distribution or notice of redemption, as the case may be, redemption if the dividend, distribution or redemption such payment would have been permitted on the date of such declaration or notice;
(2) the date purchase, redemption or other acquisition or retirement of any Capital Stock of IRSA made in exchange for or out of the notice proceeds of redemptionthe issuance or sale of Capital Stock of IRSA;
(3) the purchase, as redemption or other acquisition or retirement of any Capital Stock or other securities exercisable or convertible into Capital Stock from any current or former employees, officers, directors or consultants of IRSA or any of its Subsidiaries or their authorized representatives upon the case may bedeath, would have complied disability or termination of employment or directorship of such employees, officers or directors, or the termination of retention of any such consultants;
(4) the purchase, redemption or other acquisition or retirement of any Capital Stock deemed to occur upon the exercise of stock options, warrants or similar rights if such Capital Stock represents a portion of the exercise price of those stock options, warrants or similar rights;
(5) the purchase, redemption or other acquisition or retirement of any fractional shares arising out of stock dividends, splits or combinations or business combinations;
(6) payments or distributions to dissenting stockholders of Capital Stock of IRSA or its Subsidiaries pursuant to applicable law in connection with a consolidation, merger or similar transaction that complies with the provisions of the Indenture;
(27) Restricted Payments in an amount not to exceed the sum of the aggregate net proceeds and the Fair Market Value of any property or other assets received by the Issuer or any Subsidiary after the Issue Date from (i) contributions of capital or the issuance or sale of Capital Stock or (ii) the redemption, repurchase, retirement, defeasance or other acquisition issuance of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company Issuer or any of its Restricted Subsidiaries pursuant to any equity subscription agreement that has been converted into or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid exchanged for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07after the Issue Date; or
(9) other 8) Restricted Payments in an aggregate amount since May 11, 2004 taken together with all other Restricted Payments made subsequent to the Effective Date pursuant to this clause (8) not to exceed $25.0 million; provided, however, that at the time of, greater of US$50.0 million (or the equivalent in other currencies) and after giving effect to, any Restricted Payment permitted under 10% of the preceding clause (9), no Default or Event consolidated total assets of Default shall have occurred and be continuing or would be caused thereby. The amount IRSA as of all Restricted Payments (other than cash) will be the fair market value on the last date of the Restricted Payment its most recent fiscal quarter.”
(c) Section 3.19 (Limitation on Designation of Unrestricted Subsidiaries) of the asset(sIndenture is amended by (i) or securities proposed to be transferred or issued by deleting the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, word “(a)” where it appears in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause Clause (2), ; (ii) deleting the words “an Investment” where they appear in clause (3) and inserting in lieu thereof the words “a Restricted Payment”; and (iii) deleting the words “as a Restricted Payment” and “or as a Permitted Investment” in clause (3), .
(4), d) Section 3.20 (6), (7Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or Indenture is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part amended by deleting it in its sole discretionentirety and inserting in lieu thereof the phrase “[intentionally omitted]”.
(e) such Restricted Payment Section 3.23 (Limitation on Guarantees) of the Indenture is amended by deleting it in any manner that complies its entirety and inserting in lieu thereof the phrase “[intentionally omitted]”.
(f) Section 3.24 (Limitation on Transactions with this Section 4.07Affiliates) of the Indenture is amended by (i) deleting the words “Issue Date” where they appear in clause (2)(c) and inserting in lieu thereof the words “Effective Date” and (ii) deleting the words “and Permitted Investments” in clause (2)(d).
Appears in 2 contracts
Sources: Supplemental Indenture (Irsa Investments & Representations Inc), Supplemental Indenture (Cresud Inc)
Limitation on Restricted Payments. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, take the following actions:
(1i) declare or pay any dividend on, or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitationto holders of, any payment in connection with any merger or consolidation to which shares of Capital Stock of the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Subsidiary (other than dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) shares of Qualified Capital Stock of the Company or payable in options, warrants or other rights to the Company or a Restricted Subsidiary purchase Qualified Capital Stock of the Company);
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct or indirect parent Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company);
(3iii) make any principal payment on or with respect to, or purchaserepurchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled repayment principal payment, scheduled sinking fund payment or scheduled maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except a payment, purchase, redemption, defeasance or other acquisition of in any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year case out of the date proceeds of such paymentPermitted Refinancing Indebtedness, purchase, redemption, defeasance or other acquisition; or
(4iv) make any Restricted Investment Investment; (all such payments and or other actions set forth described in these clauses (1i) through (4iv) above being collectively referred to as “Restricted Payments”), unless, unless at the time of and after giving effect to such the proposed Restricted Payment:
(1) no Default or Event of Default has shall have occurred and is continuing or would occur as a consequence of such Restricted Paymentbe continuing;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of accordance with Section 4.099.12(a) hereof; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made by the Company and its Restricted Subsidiaries after May 11January 1, 2004 shall not exceed the sum (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7without duplication) and (8) of the next succeeding paragraph), is less than the sum, without duplication, offollowing:
(aA) 50% of the Consolidated Net Income of the Company for accrued on a cumulative basis during the period (taken as one accounting period) from April beginning on January 1, 2004 to and ending on the end last day of the Company’s most recently ended last fiscal quarter for which internal financial statements are available at ending prior to the time date of such proposed Restricted Payment (or, if such Consolidated Net Income for such period is shall be a deficitloss, less minus 100% of such deficitloss), ; plus
(bB) 100% of the aggregate net cash proceeds Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (including other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the fair market value Company or any options, warrants or rights to purchase such shares of any Additional Assets to Qualified Capital Stock of the extent acquired in consideration Company; plus
(C) the aggregate Net Cash Proceeds, or the Fair Market Value of Equity Interests of Property other than cash, received after January 1, 2004 by the Company (other than Disqualified Stock)from any of its Restricted Subsidiaries) since May 11upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus
(D) the aggregate Net Cash Proceeds received after January 1, 2004 as a contribution to its common equity capital or by the Company from the issue issuance or sale of Equity Interests of the Company (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Capital Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Qualified Capital Stock or debt securities) sold to a Subsidiary of the Company), together with the aggregate cash received by the Company at the time of such conversion or exchange; plus
(cE) to the extent that any not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Investment that was made Subsidiary after May 11January 1, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that from any Unrestricted Subsidiary or from the redesignation of the Company is redesignated an Unrestricted Subsidiary as a Restricted Subsidiary after May 11(valued in each case as provided in the definition of “Investment”), 2004, not to exceed in the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment case of any dividend or distribution or Unrestricted Subsidiary the consummation total amount of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale Investments (other than to a Permitted Investments) in such Unrestricted Subsidiary of the Company) of, Equity Interests of made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004.
(other than Disqualified Stockb) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
), (5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
and (7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (abelow) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing continuing:
(1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above);
(2) the payment of any dividend payable from a Restricted Subsidiary to the Company or would be caused thereby. The amount any other Restricted Subsidiary of all the Company;
(3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Payments Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than cashto a Restricted Subsidiary) will of shares of Qualified Capital Stock of the Company;
(4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company;
(5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be the fair market value on due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of the Restricted Payment determination) of the asset(s) Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or securities proposed retired, plus the amount of any premium required to be transferred paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or issued the amount of any premium reasonably determined by the Company or as necessary to accomplish such Restricted Subsidiaryrefinancing, as plus the case may be, pursuant to the Restricted Payment. The fair market value amount of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer expenses of the Company andincurred in connection with such refinancing, in (b) such new Indebtedness is subordinated to the case Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of amounts the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of $50.0 million the Notes;
(6) loans made to officers, directors or more, employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the CompanyCompany in an aggregate amount not to exceed $1,000,000 outstanding at any one time, whose determination shall be evidenced by the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a Board Resolutionrestricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and
(7) other Restricted Payments in an aggregate amount not to exceed $10,000,000. Not later than the date of making any Restricted Payment (excluding any Restricted Payment The actions described in the preceding clause clauses (21), (3), (4), ) and (6), ) of this paragraph (7b) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of shall be Restricted Payments described in the preceding clauses (1) through (9), or is entitled that shall be permitted to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies accordance with this Section 4.07.paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause
Appears in 1 contract
Sources: Fourth Supplemental Indenture (Comstock Oil & Gas GP, LLC)
Limitation on Restricted Payments. The Company will not, and will not cause or permit any of its the Restricted Subsidiaries to, directly or indirectly:
, (1a) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary Qualified Capital Stock of the Company);
) on or in respect of shares of the Company's Capital Stock to holders of such Capital Stock, (2b) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct warrants, rights or indirect parent options to purchase or acquire shares of the Company;
any class of such Capital Stock, (3c) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date Company or its Subsidiaries that is subordinate or junior in right of such paymentpayment to the Securities, purchase, redemption, defeasance or other acquisition; or
(4d) make any Restricted Investment (all such payments and other than Permitted Investments) (each of the foregoing actions set forth in these clauses (1a), (b), (c) through and (4d) above being collectively referred to as “a "Restricted Payments”Pay ment"), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, if at the time of such Restricted Payment and or immediately after giving pro forma effect thereto as if such Restricted Payment had been made at thereto, (i) a Default or an Event of Default shall have occurred and be continuing or (ii) the beginning of the applicable four-quarter period, have been permitted Company is not able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth (other than Permitted Indebtedness) in the first paragraph of compliance with Section 4.09; and
4.04 or (3iii) such Restricted Payment, together with the aggregate amount of all other Restricted Payments (including such proposed Restricted Payment) made subsequent to the Issue Date (the amount expended for such purposes, if other than in cash, being the fair market value of such property as determined reasonably and in good faith by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) Board of Directors of the next succeeding paragraph), is less than Company) shall exceed the sum, without duplication, sum of:
: (aw) 50% of the cumulative Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, or if such cumulative Consolidated Net Income for such period is shall be a deficitloss, less minus 100% of such deficitloss) of the Company from and including the first full fiscal quarter of the Company commencing after the Issue Date to the date the Restricted Payment occurs (the "Reference Date") (treating such period as a single accounting period), plus
; plus (bx) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of from any Additional Assets to the extent acquired in consideration of Equity Interests of the Company Person (other than Disqualified Stock)a Subsidiary of the Company) since May 11, 2004 as a contribution to its common equity capital or from the issue issuance and sale subsequent to the Issue Date and on or sale prior to the Reference Date of Equity Interests Qualified Capital Stock of the Company; plus (y) without duplication of any amounts included in clause (iii)(x) above, 100% of the aggregate net cash proceeds of any equity contribution received by the Company from a holder of the Company's Capital Stock (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to . Notwithstanding the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cashforegoing, the lesser of (i) provisions set forth in the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The immediately preceding provisions will paragraph do not prohibit:
: (1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, payment within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution dividend or redemption payment on the date of declaration or the date of the notice of redemptionpayment, as the case may be, would have complied with been permitted on the provisions date of the Indenture;
declaration; (2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing continuing, the repurchase, redemption, retirement or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value acquisition of any assets or securities that are required to be valued by this covenant will be determined, in the case shares of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors Capital Stock of the Company, whose determination either (i) solely in exchange for shares of Qualified Capital Stock of the Company or (ii) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Quali- fied Capital Stock of the Company; (3) if no Default or Event of Default shall have occurred and be continuing, the repurchase, redemption, retirement or acquisition of any Indebtedness of the Company or a Subsidiary of the Company that is subordinate or junior in right of pay ment to the Securities either (i) solely in exchange for shares of Qualified Capital Stock of the Company, or (ii) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of (A) shares of Qualified Capital Stock of the Company or (B) Refinancing Indebtedness; (4) so long as no Default or Event of Default shall have occurred and be continuing, pursuant to and in accordance with the Stock Option Plan, the purchase of capital stock or options from members of management or directors of the Company upon the terms set forth in the Stock Option Plan for consideration consisting of cash and/or Subordinated Management Notes; (5) the making of Restricted Payments in an aggregate amount not to exceed $2.5 million; (6) the payment of a dividend as described in the Final Memorandum under "Use of Proceeds" within 90 days of the Issue Date in an aggregate amount not to exceed $10 million; and (7) the purchase of an aggregate 50,625 shares of Common Stock from two former employees of the Company, for an aggregate purchase price (exclusive of interest) not to exceed $700,000, pursuant to those certain letter agreements dated September 10, 1996. In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date in accordance with clause (iii) of the immediately preceding paragraph, amounts expended pursuant to clauses (1), (2)(ii), (3)(ii)(A) and (5) above and clause (vi) of the definition of Permitted Investments shall be evidenced by a Board Resolutionincluded in such calculation. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2)Payment, (3), (4), (6), (7) or (8)) the Company will shall deliver to the Trustee an Officers’ ' Certificate stating that such Restricted Payment is permitted complies with this Indenture and setting forth in reasonable detail the basis upon which the required calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in which calculations may be based upon the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Company's latest available internal quarterly financial statements.
Appears in 1 contract
Sources: Indenture (Sheffield Steel Corp)
Limitation on Restricted Payments. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, take the following actions:
(1i) declare or pay any dividend on, or make any other payment or distribution on account to holders of, any shares of Capital Stock of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) shares of Qualified Capital Stock of the Company or payable in options, warrants or other rights to the Company or a Restricted Subsidiary purchase Qualified Capital Stock of the Company);
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct Affiliate thereof (other than any Restricted Subsidiary) or indirect parent of the Companyany options, warrants or other rights to acquire such Capital Stock;
(3iii) make any principal payment on or with respect to, or purchaserepurchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled repayment principal payment, scheduled sinking fund payment or scheduled maturity, any Subordinated Indebtedness, except a payment, purchase, redemption, defeasance or other acquisition of in any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year case out of the date proceeds of such paymentPermitted Refinancing Indebtedness, purchase, redemption, defeasance or other acquisition; or
(4iv) make any Restricted Investment Investment; (all such payments and or other actions set forth described in these clauses (1i) through (4iv) above being collectively referred to as “"Restricted Payments”"), unless, unless at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such proposed Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemptionRestricted Payment, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (if other than cash) will , shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, amount determined by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a Board Resolution. Not later than ), (A) no Default or Event of Default shall have occurred and be continuing, (B) the Company could incur $1.00 of additional Indebtedness (excluding Permitted Indebtedness) in accordance with Section 10.12(a) hereof and (C) the 68 83 aggregate amount of all Restricted Payments declared or made after the date of making any this Indenture shall not exceed the sum (without duplication) of the following:
(1) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on October 1, 1997 and ending on the last day of the Company's last fiscal quarter ending prior to the date of such proposed Restricted Payment (excluding or, if such Consolidated Net Income shall be a loss, minus 100% of such loss), plus
(2) the aggregate Net Cash Proceeds received after the date of this Indenture by the Company from the issuance or sale (other than to any of its Restricted Payment described Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company, plus
(3) the aggregate Net Cash Proceeds received after the date of this Indenture by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company, plus
(4) the aggregate Net Cash Proceeds received after the date of this Indenture by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange, plus
(5) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after the date of this Indenture from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the preceding clause definition of Investment), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (2other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after the date of this Indenture, plus
(6) $25,000,000.
(b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (ii), (3iii) and (iv) below) no Default or Event of Default shall have occurred and be continuing:
(i) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above);
(ii) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company;
(iii) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; and
(iv) repurchases, acquisitions or retirements of shares of Qualified Capital Stock of the Company deemed to occur upon the exercise of stock options or similar rights issued under employee benefit plans of the Company if such shares represent all or a portion of the exercise price or are surrendered in connection with satisfying any federal income tax obligation. The actions described in clauses (i), (4ii), (6iii) and (iv) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (C) of paragraph (a), provided that any dividend paid pursuant to clause (7i) or of this paragraph (8)b) shall reduce the amount that would otherwise be available under clause (C) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (i).
(c) In computing Consolidated Net Income under paragraph (a) above, (1) the Company will deliver shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the Trustee an Officers’ Certificate stating financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment is would in the good faith determination of the Company be permitted and setting forth under the basis upon which the calculations required by requirements of this Section 4.07 were computed. For purposes of determining Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Section 4.07, Indenture notwithstanding any subsequent adjustments made in good faith to the event that a Restricted Payment meets the criteria of more than one Company's financial statements affecting Consolidated Net Income of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in for any manner that complies with this Section 4.07period.
Appears in 1 contract
Limitation on Restricted Payments. The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly:,
(1i) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which of the Company or any of its Restricted Subsidiaries is a party) Subsidiary or make any payment or distribution to the direct or indirect holders of Equity Interests of the Company’s Company or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Subsidiary (other than any dividends, distributions and payments made to the Company or any Restricted Subsidiary and dividends or distributions payable to any Person solely in Qualified Equity Interests (or in options, warrants or other than Disqualified Stock) of the Company or payable rights to the Company or a Restricted Subsidiary of the Companypurchase Qualified Equity Interests);
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct Restricted Subsidiary (other than any such Equity Interests owned by the Company or indirect parent of the Companyany Restricted Subsidiary);
(3iii) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value value, or make any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees principal payment on, prior to any scheduled maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchase, redemption, defeasance or any Subordinated Indebtedness (other acquisition of than any such Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionheld by any Restricted Subsidiary); or
(4iv) make any Restricted Investment (all such payments and other actions set forth in these clauses than Permitted Investments) (1) through (4) above being collectively referred to as “any of the foregoing, a "Restricted Payments”Payment"), unless,
(a) no Default shall have occurred and be continuing at the time of and or after giving effect to such Restricted Payment:;
(b) immediately after giving effect to such Restricted Payment, the Company would be able to Incur $1.00 of additional Indebtedness under Section 4.12(a); and
(c) immediately after giving effect to such Restricted Payment, the aggregate amount of all Restricted Payments (including the Fair Market Value of any non-cash Restricted Payment) declared or made on or after the Issue Date (excluding any Restricted Payment described in clauses (ii), (iii) or (iv) of the next paragraph) does not exceed an amount equal to the sum of the following (the "Basket"):
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2x) the Company would, Cumulative Operating Cash Flow determined at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
less (3y) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50150% of the cumulative Consolidated Net Income of the Company Interest Expense determined for the period (taken treated as one accounting period) from April 1commencing on January 4, 2004 to 1999 and ending on the end last day of the Company’s most recently ended recent fiscal quarter for which internal financial statements are available at immediately preceding the time date of such Restricted Payment (or, if such Consolidated Net Income for such period which consolidated financial information of the Company is a deficit, less 100% of such deficit)required to be available, plus
(b2) 100% of the aggregate net cash proceeds received by the Company either (including x) as capital contributions to the fair market value Company after the Issue Date or (y) from the issue and sale (other than to a Subsidiary) of Qualified Equity Interests after the Issue Date (other than any Additional Assets issuance and sale of Qualified Equity Interests (A) financed, directly or indirectly, using funds (I) borrowed from the Company or any Subsidiary until and to the extent acquired such borrowing is repaid or (II) contributed, extended, guaranteed or advanced by the Company or any Subsidiary (including, without limitation, in consideration respect of Equity Interests any employee stock ownership or benefit plan) or (B) the proceeds of which are used to effect any transaction permitted by clauses (ii), (iii) or (iv) of the next paragraph), plus
(3) the aggregate amount by which Indebtedness (other than any Subordinated Indebtedness) of the Company or any Restricted Subsidiary is reduced on the Company's balance sheet upon the conversion or exchange (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to by a Subsidiary of the Company) subsequent to the Issue Date into Qualified Equity Interests (less the amount of any cash, or the fair value of property, distributed by the Company or any Restricted Subsidiary upon such conversion or exchange), plus
(c4) in the case of the disposition or repayment of any Investment that was treated as a Restricted Payment made after the Issue Date, an amount (to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, not included in the computation of Cumulative Operating Cash Flow) equal to the lesser of of: (ix) the cash return of capital with respect to such Investment and (y) the amount of such Investment that was treated as a Restricted Investment (Payment, in either case, less the cost of disposition, if any) and (ii) the initial amount disposition of such Restricted InvestmentInvestment and net of taxes, plus
(d5) so long as the Designation thereof was treated as a Restricted Payment made after the Issue Date, with respect to the extent that any Unrestricted Subsidiary of the Company is that has been redesignated as a Restricted Subsidiary after May 11the Issue Date in accordance with Section 4.14, 2004the Company's proportionate interest in an amount equal to the excess of (x) the total assets of such Subsidiary, valued on an aggregate basis at the lesser of book value and Fair Market Value, over (iy) the fair market value total liabilities of such Subsidiary, determined in accordance with GAAP (and provided that such amount shall not in any case exceed the Designation Amount with respect to such Restricted Subsidiary upon its Designation), minus
(6) with respect to each Subsidiary of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on Company which such Subsidiary was originally has been designated as an Unrestricted SubsidiarySubsidiary after the Issue Date in accordance with Section 4.14, the greater of (x) $0 and (y) the Designation Amount thereof (measured as of the Date of Designation). The preceding foregoing provisions will not prohibit:
prevent (1i) the payment of any dividend or distribution on, or the consummation of any irrevocable redemption of debt that is subordinate to the Notesof, Equity Interests within 60 days after the date of declaration of such dividend or distribution or the delivery giving of any irrevocable formal notice of such redemption, as the case may be, if the dividend, distribution or redemption payment on at the date of such declaration or the date giving of the formal notice of redemption, as the case may be, such payment or redemption would have complied comply with the provisions of the this Indenture;
; (2ii) the purchase, redemption, repurchase, retirement, defeasance retirement or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent (A) common equity capital contribution to the Company from any Person (other than a Subsidiary) or (B) issue and sale (other than to a Subsidiary of the CompanySubsidiary) of, Qualified Equity Interests Interests; (iii) any Investment to the extent that the consideration therefor consists of the Company net proceeds of the substantially concurrent issue and sale (other than Disqualified Stock)to a Subsidiary) of Qualified Equity Interests; (iv) the purchase, with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasanceSubordinated Indebtedness made in exchange for, redemption, repurchase, retirement or other acquisition out of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, a substantially concurrent issue and sale (other than to a Subsidiary) of, (x) Qualified Equity Interests or in exchange for, Permitted Refinancing Indebtedness;
(4y) other Subordinated Indebtedness having no stated maturity for the payment of any dividend or distribution by a Restricted Subsidiary of the Company principal thereof prior to the holders of its Equity Interests on a pro rata basis;
Maturity Date; or (5v) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million Investment in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 millionPerson; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding Investments pursuant to this clause (9v) shall not exceed $25.0 million in the aggregate at any time outstanding; provided, further, however, that in the case of each of clauses (ii), (iii), (iv) and (v), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07arise therefrom.
Appears in 1 contract
Limitation on Restricted Payments. The Company will Parent shall not, and will shall not permit any Restricted Subsidiary or, in the case of its Restricted Subsidiaries toparagraphs (3) and (4) below, the Company to take, directly or indirectly, any of the following actions:
(1) declare or pay any dividend on, or make any other payment or distribution on account to holders of, any shares of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders Capital Stock of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Parent (other than dividends or distributions payable solely in Equity Interests (shares of its Qualified Capital Stock or in options, warrants or other than Disqualified rights to acquire such shares of Qualified Capital Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value value, directly or indirectly, any shares of Capital Stock of the Parent or any Capital Stock of any of its Affiliates (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests other than Capital Stock of the Company or any direct Wholly Owned Restricted Subsidiary) or indirect parent any options, warrants or other rights to acquire such shares of the CompanyCapital Stock;
(3) make any principal payment on or with respect toon, or purchaserepurchase, redeem, defease or otherwise acquire or retire for value value, prior to the Stated Maturity of any principal payment or any sinking fund payment, any Indebtedness of the Parent or of the Company that is expressly subordinated in right of payment to the Notes or to the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturityGuarantees, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or as the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitioncase may be; or
(4) make any Restricted Investment (all other than any Permitted Investment) in any Person; (such payments and or other actions set forth described in these (but not excluded from) clauses (1) through (4) above being are collectively referred to as “"Restricted Payments”"), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that unless at the time of, and immediately after giving effect to, any the proposed Restricted Payment permitted under (the preceding clause (9amount of any such Restricted Payment, if other than cash, as determined by the Board of Directors of the Parent, whose determination shall be conclusive and evidenced by a Board Resolution), (A) no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The continuing, (B) the Parent could incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to Section 1011 and (C) the aggregate amount of all Restricted Payments declared or made after the Issue Date shall not exceed the sum of:
(i) 100% of Consolidated Operating Cash Flow of the Parent less 1.5 times Consolidated Interest Expense of the Parent or (ii) if Consolidated Operating Cash Flow of the Parent is a negative, minus 100% of such negative amount, in each case on a cumulative basis for the period beginning on the first day of the Parent's first fiscal quarter after the Issue Date and ending on the last day of the Parent's last fiscal quarter ending prior to the date of such proposed Restricted Payment; plus
(ii) the aggregate Net Cash Proceeds and the Fair Market Value of Telecommunications Assets or Voting Stock of a Person that becomes a Restricted Subsidiary, the assets of which consist primarily of Telecommunications Assets, received by the Parent after the Issue Date as capital contributions or from the issuance or sale (other than cashto any Subsidiary) will be the fair market value on the date of shares of Qualified Capital Stock of the Restricted Payment Parent (including upon the exercise of options, warrants or rights) or warrants, options or rights to purchase shares of Qualified Capital Stock of the asset(sParent; plus
(iii) the aggregate Net Cash Proceeds and the Fair Market Value of Telecommunications Assets or securities proposed to be transferred or issued by the Company or such Voting Stock of a Person that becomes a Restricted Subsidiary, as the case may beassets of which consist primarily of Telecommunications Assets, pursuant received by the Parent after the Issue Date from the issuance or sale (other than to any Subsidiary) of debt securities or Redeemable Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Parent, together with the aggregate Net Cash Proceeds and the Fair Market Value of Telecommunications Assets or Voting Stock of a Person that becomes a Restricted Subsidiary, the assets of which consist primarily of Telecommunications Assets, received by the Parent at the time of such conversion or exchange; plus
(iv) to the extent not otherwise included in Consolidated Operating Cash Flow of the Parent, an amount equal to the sum of (a) the net reduction in Investments (other than Permitted Investments) in any Person (other than a Restricted Payment. The fair market value Subsidiary) resulting from the payment in cash of dividends, repayments of loans or advances or other transfers of assets, in each case to the Parent or any Restricted Subsidiary after the Issue Date from such Person and (b) the amount of any assets or securities that are required to be net reduction in Investments resulting from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued by this covenant will be determinedas provided in the definition of "Investment") at the time of such redesignation; PROVIDED that, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7a) or (8)b) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07above, the Company will be permitted to divide foregoing sum shall not exceed the total amount of Investments (other than Permitted Investments) previously made in such Person or classify (or later divided or classify or reclassify in whole or in part in Unrestricted Subsidiary by the Parent and its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Subsidiaries.
Appears in 1 contract
Sources: Supplemental Indenture (Pathnet Telecommunications Inc)
Limitation on Restricted Payments. The Company will notnot make, and will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, make, any Restricted Payment, unless:
(1a) declare no Default or pay any dividend or make any other payment or distribution on account Event of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments Default shall have occurred and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, be continuing at the time of and or immediately after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2b) the Company would, at the time of such Restricted Payment and immediately after giving pro forma effect thereto as if to such Restricted Payment had been made at Payment, the beginning of the applicable four-quarter period, have been permitted to Company could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of (other than Permitted Indebtedness) under Section 4.094.10; and
(3c) immediately after giving effect to such Restricted Payment, together with the aggregate of all Restricted Payments declared or made after the Existing Notes Issue Date does not exceed the sum of (without duplication):
(1) 100% of the Company’s Cumulative EBITDA minus 1.4 times the Company’s Cumulative Consolidated Interest Expense; plus
(2) 100% of the aggregate Net Proceeds and the fair market value of securities or other property received by the Company, after January 1, 2001, from (a) the issue or sale of Capital Stock (other than Disqualified Capital Stock or Capital Stock of the Company issued to any Subsidiary of the Company) of the Company or any Indebtedness or other securities of the Company convertible into or exercisable or exchangeable for Capital Stock (other than Disqualified Capital Stock) of the Company which has been so converted or exercised or exchanged, as the case may be, (b) any capital contribution to the Company from Parent (except as contemplated by clause (vi) of the following paragraph), and (c) any loans made to the Company by Parent prior to the Existing Notes Issue Date upon the cancellation of such loans by Parent; plus
(3) the net reductions in Investments (other than reductions in Permitted Investments) in any Person resulting from payments of interest on Indebtedness, dividends, repayments of loans, partial or total releases or discharges of Guaranteed Permitted Unrestricted Subsidiary Obligations, or from designations of Unrestricted Subsidiaries as Restricted Subsidiaries, valued in each case at the fair market value thereof, not to exceed the amount of all other Restricted Payments Investments previously made by the Company and its Restricted Subsidiaries in such Person. For purposes of determining under this clause (c) the amount expended for Restricted Payments, cash distributed shall be valued at the face amount thereof and property other than cash shall be valued at its fair market value as determined by the Board of Directors of the Company reasonably and in good faith. Notwithstanding the foregoing, the Company and any of the Restricted Subsidiaries may pay any dividend or make any distribution to the Parent for the purpose of funding a payment of any dividend or making of any distribution on or in respect of shares of the Parent’s Capital Stock, in the case of each such dividend or distribution by the Company or any of the Restricted Subsidiaries constituting a Restricted Payment, to the extent that the Parent believes in good faith that it qualifies as a “real estate investment trust” under Section 856 of the Code (or any successor provision) and that the declaration or payment of a dividend or making of a distribution in such amount is necessary to maintain the Parent’s status as a REIT for any taxable year, with such dividend to be paid or distribution to be made as and when determined by the Parent, whether during or after May 11the end of the relevant taxable year; provided, 2004 however, that (excluding Restricted Payments permitted by clauses (2i) at the time of, and after giving effect to, any such dividend or distribution, no Event of Default under Section 6.01(1), (3), 2) (4without giving effect to the grace period set forth therein), (6), ) or (7) shall have occurred and (8) be continuing or would occur as a consequence thereof and the obligations in respect of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that notes shall not otherwise have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) accelerated and (ii) two consecutive dividends or distributions pursuant to this paragraph shall not be permitted during the initial amount pendency of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary single Event of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted SubsidiaryDefault. The preceding provisions will of this Section 4.11 shall not prohibit:
(1i) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may bethereof, if the dividend, distribution or redemption payment on the at such date of declaration or the date of the notice of redemption, as the case may be, such payment would have complied comply with the provisions of this Indenture; provided, however, that in calculating the Indentureaggregate amount of Restricted Payments for purposes of Section 4.11(c), such amounts declared shall be included in the calculation but such amounts expended shall be excluded from the calculation;
(2ii) the redemption, repurchase, retirement, defeasance or other acquisition retirement of any subordinated shares of Capital Stock of the Company or Indebtedness of the Company which is subordinated or any Guarantor pari passu in right of payment to the Notes by conversion into, or of any Equity Interests of the Company by or in exchange for, shares of Capital Stock (other than Disqualified Capital Stock), or out of the net cash proceeds Net Proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of other shares of Capital Stock of the Company (other than Disqualified Capital Stock); provided, with a sale being deemed substantially concurrent if such redemptionhowever, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds Net Proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will retirement shall be excluded from clause (3)(bc)(2) of this Section 4.11, provided further, however, that in calculating the preceding paragraphaggregate amount of Restricted Payments for purposes of Section 4.11(c), amounts expended pursuant to this clause (ii) shall be excluded from the calculation;
(3iii) the defeasance, redemption, repurchase, redemption or retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with which is subordinated in right of payment to the net cash proceeds from an incurrence of, or Notes in exchange for, Permitted Refinancing Indebtedness;
by conversion into, or out of the Net Proceeds of, a substantially concurrent sale or incurrence of Indebtedness (4it being understood that a redemption or retirement or irrevocable deposit for redemption or retirement of Indebtedness within 45 days of such sale or incurrence shall be deemed “substantially concurrent”) of the payment of Company (other than any dividend or distribution by Indebtedness owed to a Restricted Subsidiary of the Company to the holders Company) that is, contractually subordinated in right of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect payment to the Notes to at least the same extent as the subordinated Indebtedness being redeemed or retired and (x) has completed a Stated Maturity no earlier than the repurchase 91st day after the Maturity Date or redemption the final maturity date of all Notes validly tendered for payment in connection with such Change the Indebtedness being redeemed or retired, whichever is earlier and (y) has an Average Life to Stated Maturity equal to or greater than the remaining Average Life to Stated Maturity of Control Offer the Indebtedness being redeemed or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 millionretired; provided, however, that at the time of, and after giving effect to, amount of any Restricted Payment permitted under the preceding such Net Proceeds that are utilized for any such redemption or retirement shall be excluded from clause (9), no Default or Event c)(2) of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.074.11, provided further, however, that in calculating the event that a Restricted Payment meets the criteria of more than one of the categories aggregate amount of Restricted Payments described in the preceding clauses (1for purposes of Section 4.11(c) through (9), or is entitled to be made amounts expended pursuant to this clause (iii) shall be excluded from the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.calculation;
Appears in 1 contract
Sources: Indenture (Lamar Media Corp/De)
Limitation on Restricted Payments. The Company will shall not, and, in the case of Clauses (2), (3) and will (4) below, shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ 's Equity Interests (Interests, including, without limitation, any payment in connection with any merger or consolidation to which involving the Company or any of its Restricted Subsidiaries is a party) Company, or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (such, other than dividends or distributions payable in its Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (value, including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of involving the Company, any of its Equity Interests;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturitySecurities, except a payment, purchase, redemption, defeasance payment of interest or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or at the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses Clauses (1) through (4) above being collectively referred to as “"Restricted Payments”"), unless, at the time of and after giving effect to such Restricted Payment:
(1) a. no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Paymentthereof;
(2) b. the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter periodPayment, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Interest Coverage Ratio test set forth in the first paragraph of Section 4.091008; and
(3) c. such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made by since July 15, 2003 (the Company and its Restricted Subsidiaries after May 11"Start Date"), 2004 (excluding Restricted Payments permitted by clauses other than those described in Clauses (2), (3), (4), (6), (75) and (8) 6) of the next succeeding paragraph)penultimate paragraph of this Section 1009, is less than shall not exceed, at the date of determination, the sum, without duplication, of:
(a) i. an amount equal to 50% of the Company's Consolidated Net Income (or, if Consolidated Net Income is a loss, minus 100% of the Company for amount of such loss) accrued during the period (taken treated as one accounting period) from April 1, 2004 beginning on the day after the Start Date to the end of the Company’s most recently ended recent full fiscal quarter for which internal financial statements are available at preceding the time date of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), which its consolidated financial statements are available; plus
(b) ii. an amount equal to 100% of the aggregate net cash proceeds Net Cash Proceeds received by the Company (including after the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 Start Date as a contribution to its common equity capital contributions or from the issue or sale of its Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of its convertible or exchangeable Disqualified Stock or its convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Restricted Subsidiary of the Company); plus,
iii. the aggregate amount returned in cash after the Start Date on or with respect to Restricted Investments whether through interest payments, dividends or other distributions or payments; plus,
(c) iv. to the extent that any Restricted Investment that was made after May 11, 2004 the Start Date is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) to the initial amount Company or any of such its Restricted Investment, Subsidiaries; plus,
(d) v. to the extent that the Company's Board of Directors designates any Unrestricted Subsidiary of that was designated as such after the Company is redesignated Start Date as a Restricted Subsidiary after May 11, 2004Subsidiary, the lesser of (i) the aggregate fair market value of all Restricted Investments owned by the Company -120- and its Restricted Subsidiaries in such Unrestricted Subsidiary. Notwithstanding the foregoing restrictions, and except as set forth in the following paragraphs, prior to the Start Date, the Company will be permitted to declare and pay dividends to the Company’s Investment 's stockholder, The Mission Group, as follows:
(1) in amounts sufficient to permit Edison International to make required interest payments on its outstanding 6 7/8% Notes due 2004;
(2) with respect to The Mission Group and Edison International's corporate overhead, in amounts that are consistent with amounts historically expended for such Subsidiary as overhead; and
(3) for other Edison International working capital and general corporate purposes in an amount not to exceed $50.0 million in aggregate. In the event the Company completes a Public Equity Offering prior to the Start Date, the provisions of this Indenture described in the immediately preceding paragraph shall not apply, and the Start Date shall be deemed to be the date of such redesignation this Indenture. In addition, so long as no Default has occurred and is continuing or (ii) such fair market value as of would be caused thereby, the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may bethereof, if the dividend, distribution or redemption payment on the at said date of declaration or the date of the notice of redemption, as the case may be, such payment would have complied with the provisions of the this Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any of the Company's subordinated Indebtedness of the Company or any Guarantor or of any its Equity Interests of the Company in exchange for, or out of the net cash proceeds Net Cash Proceeds of the substantially concurrent sale (other than to a Subsidiary one of the Companyits Restricted Subsidiaries) of, its Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds Net Cash Proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause Clause (3)(bc)(ii) of the preceding paragraphfirst paragraph of this Section 1009;
(3) the defeasance, redemption, repurchase, retirement repurchase or other acquisition of the Company's subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, of Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any of the Company's Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant member of the Company its (or any of its Restricted Subsidiaries Subsidiaries') management pursuant to any management equity subscription agreement or planagreement, stock option agreement or similar agreement or planagreements; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may shall not exceed $1.0 million in any twelve-month period (with unused amounts being carried over to succeeding twelve-month periods, subject to a maximum of $2.0 million in any twelve-month period);
(5) payments made pursuant to the Tax Sharing Agreements; provided such payments may be made whether or not a Default then exists;
(6) the acquisition of Equity Interests payment by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness to The Mission Group of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% net cash proceeds from the sale of the principal amount thereof (plus accrued and unpaid interest) in Securities or the event incurrence of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of indebtedness under the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10Term Loan; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock that in connection with any transaction such payment all such net cash proceeds so paid are promptly, but in any event prior to 6:00 p.m., Pacific Standard Time, on the date of such payment, loaned or otherwise permitted under this Section 4.07distributed by The Mission Group to Edison International and promptly, but in any event prior to 6:00 p.m., Pacific Standard Time, on the date of such payment, applied by Edison International to repay a portion of its indebtedness that matures in 2001; orand
(97) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 10.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will shall be the fair market value value, on the date of the Restricted Payment Payment, of the asset(s) assets or securities proposed to be transferred or issued to or by the Company or such its Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant Section 1009 will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, determined by the Company's Board of Directors of the Company, whose determination resolution with respect thereto shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver delivered to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Trustee.
Appears in 1 contract
Limitation on Restricted Payments. (a) The Company will not, and will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly:, take any of the following actions (each, a “Restricted Payment”):
(1i) declare or pay any dividend or make any other payment or distribution on account with respect to any of the Company’s or any of its Restricted Subsidiaries’ Subsidiary’s Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which involving the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Subsidiary (other than dividends dividends, payments or distributions (x) payable in Equity Interests (other than Disqualified Stock) of the Company or payable (y) to the Company or a Restricted Subsidiary of the CompanySubsidiary));
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which involving the Company is a partyor any Restricted Subsidiary) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3iii) call for redemption or make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated value, prior to the Notes or the Subsidiary Guarantees prior to Stated Maturity thereof, any scheduled repayment or scheduled maturity, Subordinated Indebtedness except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness (a) in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereoffinal maturity, in each case, case due within one year of the date of such payment, purchase, redemption, defeasance purchase or other acquisition, or (b) intercompany Indebtedness permitted to be Incurred pursuant to Section 4.03(b)(6); or
(4iv) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”than a Permitted Investment), ; unless, at the time of and after giving pro forma effect to such Restricted Payment:
(1) (x) in the case of an Investment (other than a Permitted Investment), no Default or Specified Event of Default has shall have occurred and is be continuing or would occur as a consequence thereof, and (y) in the case of such any other Restricted Payment, no Event of Default will have occurred and be continuing or would occur as a consequence thereof;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage as Ratio test set forth in the first paragraph of Section 4.09Debt; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its the Restricted Subsidiaries after May 11April 1, 2004 2025 (excluding including Restricted Payments permitted by clauses (2), (3), (4), (6), 1) and (7) and (8) of the next succeeding paragraphSection 4.04(b), but excluding all other Restricted Payments permitted by Section 4.04(b)), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.
Appears in 1 contract
Limitation on Restricted Payments. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries Subsidiaries, including the Issuer, to, directly or indirectly:,
(1i) declare or pay any dividend on, or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitationto holders of, any payment in connection with any merger or consolidation to which shares of Capital Stock of the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Subsidiary (other than dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) shares of Qualified Capital Stock of the Company or any Restricted Subsidiary or dividends or distributions payable to the Company or a the Issuer or any Wholly Owned Restricted Subsidiary of the CompanyCompany or the Issuer or warrants, rights or options to acquire Qualified Capital Stock of the Company or any Restricted Subsidiary);,
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests such shares of Capital Stock of the Company or any direct Affiliate (other than any Capital Stock owned by the Company or indirect parent any of the Company;its Wholly Owned Restricted Subsidiaries), or any options, warrants or other rights to acquire such Capital Stock,
(3iii) make any principal payment on or with respect to, or purchaserepurchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled repayment principal payment, scheduled sinking fund payment or scheduled maturity, except a paymentany Subordinated Indebtedness, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4iv) make any Restricted Investment Investment, (all such payments and or other actions set forth described in these clauses (1i) through (4iv) above being collectively referred to as “a "Restricted Payments”Payment"), unless, unless at the time of and after giving effect to the proposed Restricted Payment (the amount of any such Restricted Payment:
, if other than cash, shall be the amount determined by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a Board Resolution), (1) no Default or Event of Default has shall have occurred and is continuing or would occur as a consequence of such Restricted Payment;
be continuing, (2) the Company wouldcould incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) in accordance with Section 4.12(a), and (3) the aggregate amount of all Restricted Payments declared or made after the Issue Date shall not exceed the sum (without duplication) of the following:
(A) 50% of the Adjusted Consolidated Net Income of the Company accrued on a cumulative basis during the period commencing with the first full quarter after the Issue Date and ending on the last day of the Company's last fiscal quarter ending prior to the date of such proposed Restricted Payment (or if Adjusted Consolidated Net Income is a loss, minus 100% of such loss), plus
(B) the aggregate Net Proceeds received after the Issue Date by the Company or the Issuer from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or the Issuer or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company or the Issuer, plus
(C) the aggregate Net Proceeds received after the Issue Date by the Company or the Issuer (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company or the Issuer, plus
(D) the aggregate Net Proceeds received after the Issue Date by the Company or the Issuer from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company or the Issuer, together with the aggregate cash received by the Company or the Issuer at the time of such Restricted Payment conversion or exchange, minus
(E) the amount of any write-downs, writeoffs, other negative revaluations, and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning other negative extraordinary charges not otherwise reflected in Adjusted Consolidated Net Income of the applicable four-quarter Company during such period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and.
(3b) such Restricted PaymentNotwithstanding the foregoing paragraph (a) of this Section 4.10, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11Subsidiaries, 2004 including the Issuer, may take the following actions so long as (excluding Restricted Payments permitted by in the case of clauses (2), (3), (4), (6), 5) and (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(abelow) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing continuing:
(1) the payment of any dividend on Capital Stock of the Company or would be caused thereby. The amount any Restricted Subsidiary within 60 days after the date of all declaration thereof, if at such declaration date such declaration complied with the provisions of Section 4.10(a);
(2) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Payments Subsidiary, in exchange for, or out of the aggregate Net Proceeds from, a substantially concurrent issue and sale (other than cashto a Restricted Subsidiary) will be of shares of Qualified Capital Stock of the fair market Company or the Issuer;
(3) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of (i) Subordinated Indebtedness (provided such Indebtedness is on terms no less favorable to the Holders of the Notes than the terms of the Subordinated Indebtedness being redeemed) or (ii) shares of Qualified Capital Stock of the Company or the Issuer;
(4) the repurchase, redemption or other acquisition of any Capital Stock of any Affiliate organized as a limited partnership in which the Company or the Issuer is a general partner pursuant to a redemption which is mandatory under the terms of such partnership's limited partnership agreement;
(5) the repurchase or other acquisition of any Capital Stock of any Restricted Subsidiary, whether in one or a series of substantially contemporaneous transactions, which causes such Person to become a Wholly Owned Restricted Subsidiary of the Company;
(6) the payment on behalf of any Subsidiary or Affiliate of its allocated pro rata costs associated with the issuance of the Notes and any Investment in Capital Stock of such Person taken by the Company in payment thereof;
(7) the distribution or dividend by the Company to its stockholders of the shares of Capital Stock of Red Oak directly owned by the Company, provided at the time of such distribution or dividend (and after giving effect thereto):
(i) the Consolidated Fixed Charge Coverage Ratio for the Company's Reference Period for which internal financial statements are available immediately preceding the date of such distribution would have been at least 3.0 to 1.0; and
(ii) the Restricted Payment Company's Adjusted Consolidated Net Tangible Assets are equal to or greater than 200% of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer consolidated Indebtedness of the Company and, and its Restricted Subsidiaries.
(c) The actions described in the case clause (1) of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination Section 4.10(b) shall be evidenced by a Board Resolution. Not later than Restricted Payments that shall be permitted to be made in accordance with Section 4.10(b) but shall reduce the date amount that would otherwise be available for Restricted Payments under clause (3) of making Section 4.10(a), provided that any Restricted Payment dividend paid pursuant to clause (excluding 1) of Section 4.10(b) shall reduce the amount that would otherwise be available under clause (3) of Section 4.10
(a) when declared, but not also when subsequently paid pursuant to clause (1) of Section 4.10(b), and provided that any Restricted Payment described in the preceding Net Proceeds received under clause (2), (3), (4), (6), (7) or (8)3)(ii) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this of Section 4.07 were computed. For purposes 4.10(b) shall not be included in subclauses (B) or (C) of determining compliance with this clause (3) of Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (94.10(a), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.
Appears in 1 contract
Limitation on Restricted Payments. The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
, (1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary Qualified Capital Stock of the Company);
) on or in respect of shares of the Company's Capital Stock to holders of such Capital Stock; (2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct warrants, rights or indirect parent options to purchase or acquire shares of any class of such Capital Stock of the Company;
; (3) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled final maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date Company that is subordinate or junior in right of such payment, purchase, redemption, defeasance payment to the Securities or any Guarantee (other acquisitionthan Indebtedness described in clause (7) of the definition of "Permitted Indebtedness"); or
or (4) make any Restricted Investment (all such payments and other than Permitted Investments) (each of the foregoing actions set forth in these clauses (1), (2), (3) through and (4) above being collectively referred to as “Restricted Payments”a "RESTRICTED PAYMENT"), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, if at the time of such Restricted Payment and or immediately after giving pro forma effect thereto as if such Restricted Payment had been made at thereto:
(a) a Default or an Event of Default shall have occurred and be continuing; or
(b) the beginning of the applicable four-quarter period, have been permitted Company is not able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth (other than Permitted Indebtedness) in the first paragraph of compliance with Section 4.094.4; andor
(3c) such Restricted Payment, together with the aggregate amount of all other Restricted Payments (including such proposed Restricted Payment) made subsequent to November 28, 2001 (the amount expended for such purposes, if other than in cash, being the fair market value of such property as determined reasonably and in good faith by the Board of Directors of the Company whose determination shall be conclusive) shall exceed the sum of:
(i) 50% of the cumulative Consolidated Net Income (or if cumulative Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company earned subsequent to November 28, 2001 and on or prior to the date the Restricted Payment is made (the "REFERENCE DATE") (treating such period as a single accounting period); plus
(ii) 100% of the aggregate Net Cash Proceeds and the fair market value, as determined in good faith by the Board of Directors of the Company, of property other than cash received by the Company from any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to November 28, 2001 and on or prior to the Reference Date of Qualified Capital Stock of the Company (other than Excluded Contributions); plus
(iii) without duplication of any amounts included in clause (c)(ii) above, 100% of the aggregate Net Cash Proceeds of any equity contribution received by the Company subsequent to November 28, 2001 from a holder of the Company's Capital Stock (other than Excluded Contributions); plus
(iv) the amount by which Indebtedness of the Company or any of its Restricted Subsidiaries after May 11is reduced on the Company's balance sheet upon the conversion or exchange subsequent to November 28, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) 2001 of any Indebtedness of the next succeeding paragraph)Company or any of its Restricted Subsidiaries incurred after November 28, is less than the sum, 2001 into or for Qualified Capital Stock; plus
(v) without duplication, the sum of:
(a) 50% of the Consolidated Net Income of the Company for the period aggregate amount returned in cash on or with respect to Investments (taken as one accounting periodother than Permitted Investments) from April 1made subsequent to November 28, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or2001 whether through interest payments, if such Consolidated Net Income for such period is a deficitprincipal payments, less 100% of such deficit), plusdividends or other distributions or payments;
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of or any Additional Assets to the extent acquired in consideration of Equity Interests Restricted Subsidiary of the Company from the disposition of all or any portion of such Investments (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus; and
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser upon redesignation of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any an Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11Subsidiary, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary (valued in each case as provided in the definition of "Investment"); PROVIDED, HOWEVER, that the date sum of clauses (a), (b) and (c) above shall not exceed the aggregate amount of all such redesignation Investments made by the Company or (ii) such fair market value as of any Restricted Subsidiary in the date on which such relevant Person or Unrestricted Subsidiary was originally designated as an Unrestricted Subsidiarysubsequent to November 28, 2001. The Notwithstanding the foregoing, the provisions set forth in the immediately preceding provisions will paragraph do not prohibit:
(1) the payment of any dividend or other distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, other distribution if the dividend, dividend or other distribution or redemption payment would have been permitted on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenturedeclaration;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing continuing, the acquisition of any shares of Capital Stock of the Company, either (a) solely in exchange for shares of Qualified Capital Stock of the Company, or would be caused thereby. The amount (b) through the application of all Restricted Payments net proceeds of a substantially concurrent sale for cash (other than cash) will be the fair market value on the date to a Subsidiary of the Restricted Payment Company) of shares of Qualified Capital Stock of the asset(sCompany;
(3) if no Default or securities proposed Event of Default shall have occurred and be continuing, the acquisition of any Indebtedness of the Company that is subordinate or junior in right of payment to the Securities or a Guarantee either (a) solely in exchange for shares of Qualified Capital Stock of the Company, or (b) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of (i) shares of Qualified Capital Stock of the Company, or (ii) Refinancing Indebtedness;
(4) if no Default or Event of Default shall have occurred and be transferred or issued continuing, repurchases by the Company or any Restricted Subsidiary of the Company of securities of the Company from employees, directors or consultants of the Company or any Subsidiaries of the Company or their authorized representatives (a) upon the death, disability or termination of employment of such employees, directors or consultants or to the extent required pursuant to employee benefit plans, employment agreements or consulting agreements or (b) pursuant to any other agreements with such employees or directors of or consultants to the Company or any Subsidiaries of the Company, in an aggregate amount not to exceed $7.5 million in any calendar year (with unused amounts in any calendar year being carried over to succeeding years subject to a maximum of $15.0 million in any calendar year), PROVIDED that the cancellation of Indebtedness owing to the Company or any Restricted SubsidiarySubsidiary of the Company from such employees, directors or consultants of the Company or any of its Restricted Subsidiaries in connection with a repurchase of Capital Stock of the Company will not be deemed to constitute a Restricted Payment under this Indenture;
(5) the declaration and payment of dividends to holders of any class or series of Preferred Stock of the Company, provided that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Preferred Stock, after giving effect to such issuance on a PRO FORMA basis, the Company would have been able to incur at least $1.00 of Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.4;
(6) the payment of dividends on the Company's Common Stock following the first public offering of the Company's Common Stock after the Issue Date, of up to 6% per annum of the net proceeds received by the Company in such public offering (other than public offerings with respect to the Company's Common Stock registered on Form S-8);
(7) the repurchase, retirement or other acquisition or retirement for value of any securities of the Company in existence on the Issue Date and from the Persons holding such securities on the Issue Date which are not held by Apollo or any of its Affiliates or members of management of the Company and its Subsidiaries on the Issue Date (including any equity interests issued in respect of any such securities constituting equity interests as a result of a stock split, recapitalization, merger, combination, consolidation or similar transaction); PROVIDED, HOWEVER, that the case may beCompany shall be permitted to make Restricted Payments under this clause only if after giving effect thereto, the Company would be permitted to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.4;
(8) other Restricted Payments in an aggregate amount not to exceed $15.0 million;
(9) if no Default or Event of Default shall have occurred and be continuing, payments or distributions to dissenting stockholders pursuant to applicable law, pursuant to or in connection with a consolidation, merger or transfer of assets that complies with the Restricted Payment. The fair market value provisions of any this Indenture applicable to mergers, consolidations and transfers of all or substantially all of the property and assets or securities of the Company;
(10) Investments that are required made with Excluded Contributions;
(11) any payments made to be valued consummate the Transactions pursuant to or contemplated by this covenant will be determinedthe Merger Agreement and any other agreement related to the Recapitalization in effect on the closing date of the Recapitalization, in each case, as such agreements or documents are in effect on the case of amounts under $50.0 million, by an officer of the Company and, Issue Date as amended from time to time so long as such amendment is in the case good faith judgment of amounts of $50.0 million or more, by the Board of Directors of the Company not more disadvantageous to the Holders of the Securities in any material respect than such agreements or documents as in effect on the Issue Date;
(12) repurchases of Capital Stock deemed to occur upon the exercise of stock options, warrants or other convertible securities, to the extent such Capital Stock represents a portion of the consideration for such exercise;
(13) the acquisition of any shares of Disqualified Capital Stock of the Company either (a) solely in exchange for shares of Disqualified Capital Stock of the Company or (b) through the application of the net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Disqualified Capital Stock of the Company;
(14) any purchase or redemption of Indebtedness that ranks junior to the Securities utilizing any Net Cash Proceeds remaining after the Company has complied with the requirements of the covenants described under Sections 4.16 and 4.17;
(15) the payment of dividends, whose determination other distributions or amounts by the Company to any direct or indirect parents of the Company in amounts required to pay the tax obligations of the Company and its Subsidiaries and the tax obligations of any direct or indirect parents of the Company attributable to the Company and its Subsidiaries; PROVIDED that (x) the amount of dividends paid pursuant to this clause (15) to enable any direct or indirect parents of the Company to pay Federal and state income taxes at any time shall not exceed the amount of such Federal and state income taxes actually owing by any direct or indirect parents of the Company at such time for the respective period and (y) any refunds received by any direct or indirect parents of the Company attributable to the Company and its Subsidiaries shall promptly be returned by such direct or indirect parents to the Company;
(16) if no Default or Event of Default shall have occurred and be continuing, payments by the Company of cash, in lieu of the issuance of fractional shares upon the exercise of warrants or upon the conversion or exchange of, or issuance of Capital Stock in lieu of cash dividends on, any Capital Stock of the Company or any Restricted Subsidiary, which in the aggregate do not exceed $3.0 million; and
(17) the declaration and payment of dividends to the holders of the Company's Capital Stock with the gross proceeds received by the Company from the sale of the Securities on the Issue Date. In determining the aggregate amount of Restricted Payments made subsequent to November 28, 2001, in accordance with clause (c) of the immediately preceding paragraph, amounts expended pursuant to clauses (1), (2), (4), (5), (6), (7), (8), (9), (14) and (16) shall be evidenced by a Board Resolutionincluded in such calculation. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2)Payment, (3), (4), (6), (7) or (8)) the Company will shall deliver to the Trustee an Officers’ ' Certificate stating that such Restricted Payment is permitted complies with this Indenture and setting forth in reasonable detail the basis upon which the required calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in which calculations may be based upon the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Company's latest available internal quarterly financial statements.
Appears in 1 contract
Sources: Indenture (Salt Holdings Corp)
Limitation on Restricted Payments. The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment Payment unless (all such payments and other actions set forth in these clauses (1a) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and or after giving pro forma effect thereto as if such Restricted Payment had been made at thereto, no Event of Default, and no event that through the beginning passage of time or the applicable four-quarter periodgiving of notice, or both, would become an Event of Default, will have been permitted to incur occurred and be continuing, (b) after giving effect thereto, the Company could Incur at least $1.00 of additional Indebtedness Debt pursuant to the Fixed Charge Coverage Ratio test set forth in provisions of the first second paragraph of Section 4.09; and
4.12 and (3c) such Restricted Paymentafter giving effect thereto, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 the Issue Date will not exceed the sum (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, ) of:
: (ai) 50% of the Consolidated Net Income of the Company accrued for the period (taken as one accounting period) from April commencing with January 1, 2004 1998, and ending with the first full fiscal quarter ended immediately prior to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time date of such Restricted Payment (or, calculation; provided that if such Consolidated Net Income for such period is a deficitless than zero, less then minus 100% of the amount of such deficit), plus
loss; plus (bii) 10050% of that portion of the net after tax cash proceeds from the sale, transfer, carryover, lease or other disposition of the Monessen Facility that is directly attributable to the Monessen Section 29 Tax Credits; plus (iii) the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue issuance or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary Subsidiary) of the Company) of, Equity Interests of the Company its Capital Stock (other than Disqualified Redeemable Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more ) after the Issue Date (including Capital Stock (other than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(bRedeemable Stock) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence issued upon conversion of, or in exchange for, Permitted Refinancing Indebtedness;
securities other than its Capital Stock), and warrants and other rights to purchase (4) not including any such warrants or rights to purchase which are redeemable at the payment of any dividend or distribution by a Restricted Subsidiary option of the Company to holder thereof) its Capital Stock (other than Redeemable Stock); plus (iv) $5,000,000. Notwithstanding the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirementforegoing, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the may make payment of cash in lieu a dividend or other distribution on account of fractional its shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at within 90 days of the time of, and after giving effect to, any Restricted Payment declaration thereof if such declaration was permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph provisions of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.074.10.
Appears in 1 contract
Sources: Indenture (Koppers Industries Inc)
Limitation on Restricted Payments. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly:
(1) declare or pay any dividend or any other distribution on any Capital Stock of the Company make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders (in their capacities as such) of Capital Stock of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Company (other than any dividends, distributions and payments made to the Company or any Restricted Subsidiary and dividends or distributions payable to any Person solely in Equity Interests (other than Disqualified Stock) the form of the Company or payable to the Company or a Restricted Subsidiary Qualified Capital Stock of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which Capital Stock of the Company is a party) (other than any Equity Interests of such Capital Stock owned by the Company or any direct or indirect parent of the CompanyRestricted Subsidiary);
(3) make any principal payment on or with respect toon, or purchase, repurchase, redeem, defease or otherwise acquire or retire for value value, or make any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees principal payment on, prior to any scheduled maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchase, redemption, defeasance any Subordinated Indebtedness (other than any Subordinated Indebtedness held by the Company or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionRestricted Subsidiary); or
(4) make any Restricted Investment (all other than a Permitted Investment) in any Person (any such payments and payment or any other actions set forth action (other than any exception thereto) described in these clauses (1), (2), (3) through or (4) above being collectively referred to as above, a “Restricted PaymentsPayment”), unless, unless at the time the Company or such Restricted Subsidiary makes such Restricted Payment:
(A) no Default or Event of Default shall have occurred and be continuing at the time of and or immediately after giving effect to such Restricted Payment:;
(1B) no Default or Event of Default has occurred and is continuing or would occur as a consequence of immediately after giving effect to such Restricted Payment;
(2) , the Consolidated Leverage Ratio of the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted would be less than or equal to incur at least $1.00 of additional Indebtedness pursuant 5.0 to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.091.0; and
(3C) immediately after giving effect to such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made by on or after the Closing Date does not exceed an amount equal to the sum of, without duplication:
(i) 100% of the cumulative Consolidated Cash Flow of the Company and its Restricted Subsidiaries determined for the period (taken as one period) beginning on the first day of the fiscal quarter immediately following the Closing Date and ending on the last day of the most recent fiscal quarter immediately preceding the date of such Restricted Payment for which consolidated financial information of the Company is internally available (or, if such cumulative Consolidated Cash Flow shall be negative, minus 100% of such cumulative Consolidated Cash Flow) less 175% of cumulative Consolidated Interest Expense for the same period, provided that, in calculating cumulative Consolidated Cash Flow as of any date for purposes of this subclause (C)(i), the amount of Consolidated Cash Flow for any quarter included therein shall not exceed the lesser of (x) the actual amount thereof and (y) $23.75 million (provided that, to the extent any amount of Consolidated Cash Flow for any quarter has been disallowed during a fiscal year of the Company by reason of the limitation in the preceding subclause (y), such amount may be added back to the extent and only to the extent of the lesser of (i) the amount by which the Consolidated Cash Flow of the Company for such fiscal year previously included in this calculation is less than or equal to $95.0 million and (ii) the aggregate disallowed amount for such fiscal year under the preceding subclause (y)), plus
(ii) the aggregate net proceeds (including the Fair Market Value of property other than cash) received after May 11the Closing Date by the Company (other than the Cash Equity Contribution) either (x) as capital contributions to the Company or (y) from the issue and sale (other than to a Restricted Subsidiary) of its Qualified Capital Stock (except, 2004 (excluding Restricted Payments permitted by in each case, to the extent set forth in clauses (2), (3), (4), (6), (710) and (8) 11) of the next succeeding paragraphSection 4.09(b), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(biii) 100% the principal amount (or accreted amount, determined in accordance with GAAP, if less) of any Indebtedness or Disqualified Capital Stock of the aggregate net cash proceeds received by the Company (including the fair market value or any Restricted Subsidiary or Preferred Capital Stock of any Additional Assets Restricted Subsidiary that is not a Guarantor, in each case Incurred after the Issue Date to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have it has been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Qualified Capital Stock or debt securities) sold to a Subsidiary of the Company), plus
(civ) to the extent that not included in cumulative Consolidated Cash Flow for purposes of clause (C)(i) above (without limitation by reason of the proviso thereto), in the case of the disposition or repayment of any Investment (whether through interest payments, principal payments, dividends or other distributions) or the release of a guarantee constituting a Restricted Investment that was Payment made after May 11the Issue Date, 2004 is sold for cash or otherwise liquidated or repaid for cash, an amount equal to the lesser of (i) the cash return of capital with respect to such Restricted Investment (including the Fair Market Value of property other than cash), less the cost of disposition, if any) and (ii) the initial amount disposition of such Restricted InvestmentInvestment and net of taxes, and, in the case of guarantees, less any amounts paid under such guarantee, plus
(dv) with respect to the extent that any Unrestricted Subsidiary of the Company is that has been redesignated as a Restricted Subsidiary after May 11, 2004the Issue Date in accordance with Section 4.14, the lesser of (i) the fair market value Fair Market Value of the Company’s Investment interest in such Subsidiary as of the date of such redesignation or Subsidiary, plus
(iivi) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. $10.0 million.
(b) The preceding foregoing provisions will not prohibitprevent:
(1) the payment of any dividend or distribution on, or the consummation of any irrevocable redemption of debt that is subordinate to the Notesof, Capital Stock within 60 days after the date of declaration of such dividend or distribution or the delivery giving of any irrevocable formal notice of such redemption, as the case may be, if the dividend, distribution or redemption payment on at the date of such declaration or the date giving of the such formal notice of redemption, as the case may be, such payment or redemption would have complied comply with the provisions of the this Indenture;
(2) the purchase, redemption, repurchase, retirement, defeasance retirement or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests Capital Stock of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent issue and sale (other than to a Subsidiary of the CompanyRestricted Subsidiary) of, Equity Interests other Capital Stock of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that Capital Stock in the amount case of any such purchase, redemption, retirement or other acquisition of Qualified Capital Stock); provided, however, that any such net cash proceeds that are utilized and the value of any Qualified Capital Stock issued in exchange for any such Capital Stock are excluded from Section 4.09(a)(C) above (and were not included therein at any time);
(3) the purchase, redemption, repurchase, retirement, defeasance or other acquisition will be of Subordinated Indebtedness, or any other payment thereon, made in exchange for, or out of the net cash proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of:
(A) Qualified Capital Stock of the Company; provided, however, that any such net cash proceeds and the value of any such Qualified Capital Stock are excluded from clause Section 4.09(a)(C) above (3)(band were not included therein at any time) of the preceding paragraph;or
(3B) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness Disqualified Capital Stock of the Company or other Subordinated Indebtedness, in each case having no stated maturity or mandatory redemption for the payment of any Guarantor with portion of principal or liquidation preference thereof prior to the net cash proceeds from an incurrence offinal stated maturity of the Subordinated Indebtedness being purchased, redeemed, retired, defeased or in exchange forotherwise acquired and having a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Subordinated Indebtedness being purchased, Permitted Refinancing Indebtednessredeemed, retired, defeased or otherwise acquired;
(4) the payment repurchase of any dividend or distribution by a Restricted Subsidiary shares of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests Capital Stock of the Company or any Restricted Subsidiary direct or indirect parent of the Company held (or distributions to any direct or indirect parent of the Company to enable it to repurchase its Capital Stock) owned by any current former, present or former directorfuture employees, officer, employee directors or consultant consultants of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plantheir assigns, stock option agreement or similar agreement or planestates and heirs; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may amount expended pursuant to this clause (4) shall not in the aggregate exceed $2.0 million in any twelve-month periodfiscal year (with unused amounts being available to be utilized in succeeding fiscal years), plus any amounts contributed to the Company as a result of sales of any such shares of Capital Stock of the Company or any direct or indirect parent of the Company to such persons (provided that any such amounts so contributed shall not be included in clause (C) of paragraph (a) above to the extent available under this clause (4)) and the amount of any “key man” insurance proceeds received by the Company or any Restricted Subsidiary; provided that the cancellation of Indebtedness owing to the Company in connection with any such repurchase shall not be deemed a Restricted Payment;
(5) payments required pursuant to the terms of the Merger Agreement to consummate the Transactions or otherwise in connection with the Transactions;
(6) the acquisition payment of Equity Interests by the dividends on Disqualified Capital Stock of the Company in connection with or Preferred Capital Stock of a Restricted Subsidiary, the exercise incurrence of stock options or stock appreciation rights which was permitted by way of cashless exercisethis Indenture;
(7) repurchases of Capital Stock deemed to occur upon the purchaseexercise of stock options, repurchase, redemption, defeasance warrants or other acquisition convertible or retirement exchangeable securities;
(8) distributions to the extent (x) the Company is treated as a pass-through or disregarded entity for value tax purposes (such as a partnership, limited liability company or S-corporation) to the extent necessary to permit it or the direct or indirect holders of subordinated Indebtedness its Capital Stock to pay any federal, state or local taxes owing by it or them in respect of income of the Company and its Restricted Subsidiaries or (y) the Company is not such a pass-through or disregarded entity but is a member of a consolidated group of corporations that includes a holding company above it to the extent necessary to pay taxes of the consolidated group; provided that nothing in this clause (8) will be deemed to permit any such distribution (1) in excess of amounts that a consolidated group that includes the Company as the “parent” and any of the Restricted Subsidiaries would be required to pay on a stand-alone basis as a consolidated group of corporations (less amounts directly paid by them) and (2) to pay any tax liabilities of direct or indirect investors in the Company or any direct or indirect parent of the Company resulting from the conversion of the Company from a limited liability company to corporate form;
(9) the payment of dividends or other distributions to any direct or indirect parent of the Company or such company’s Subsidiaries for the purpose of paying the corporate overhead and other expenses of any Restricted Subsidiary (a) at a purchase price not greater than 101.0% direct or indirect parent of the Company or such company’s Subsidiaries to the extent such expenses are related to, or incidental to the ownership of Capital Stock of, or the guarantee of Indebtedness of, the Company and the Restricted Subsidiaries;
(10) repayment of, or payments to any direct or indirect parent of the Company and such company’s Subsidiaries to permit repayment of, principal amount thereof (plus accrued and unpaid interest) in the event interest of a Change of Control Future ABRY Subordinated Indebtedness in accordance with provisions similar to Section 4.15 or (b) the terms thereof at a purchase price not greater than 100.0% the time of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 millionits issuance; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding net proceeds received from such Future ABRY Subordinated Indebtedness are excluded from clause (9), no Default or Event C) of Default shall have occurred and be continuing or would be caused thereby. The amount of all paragraph (a) above for so long as such Future ABRY Subordinated Indebtedness is outstanding; and
(11) Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed not to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, exceed $10.0 million in the case of amounts under $50.0 million, by an officer of aggregate since the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.Issue Date;
Appears in 1 contract
Limitation on Restricted Payments. The (a) Except as otherwise provided in this Section 1009, the Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly:
make any Restricted Payment if (1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such proposed Restricted Payment:
(1) no , a Default or Event of Default has shall have occurred and is be continuing or would shall occur as a consequence of such Restricted Payment;
, (2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter periodthereto, have been permitted to incur prohibited from incurring at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Cash Flow Ratio test set forth in the first paragraph of Section 4.09; and
1007(a) or (3) immediately after giving effect to such Restricted Payment, together with the aggregate of all Restricted Payments that shall have been made since June 30, 2011 would exceed the sum of $100.0 million plus an amount equal to the difference between (i) the Cumulative Cash Flow Credit and (ii) 1.4 multiplied by Cumulative Interest Expense. For purposes of this Section 1009, the amount of all other any Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (orPayment, if such Consolidated Net Income for such period is a deficitother than cash, less 100% of such deficit), plusshall be based upon Fair Market Value.
(b) 100% Clause (a) of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will this Section 1009 shall not prohibitprevent:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may bethereof, if the dividend, distribution or redemption payment on the at such date of declaration or the date of the notice of redemption, as the case may be, would have such payment complied with the provisions clause (a) of the Indenturethis Section 1009;
(2) Permitted Affiliate Payments;
(3) the retirement, redemption, repurchase, retirementpurchase, defeasance or other acquisition of any subordinated Indebtedness shares of the Company Company’s Capital Stock or any Guarantor warrants, rights or of any Equity Interests options to acquire Capital Stock of the Company Company, in exchange for, or out of the net cash proceeds of the substantially concurrent a sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance within one year before or acquisition occurs not more than 120 180 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such retirement, redemption, repurchase, retirementpurchase, defeasance or other acquisition will be excluded from clause (3)(bacquisition) of, other shares of the preceding paragraph;
(3) the defeasanceCompany’s Capital Stock or warrants, redemption, repurchase, retirement rights or other acquisition of subordinated Indebtedness options to acquire Capital Stock of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing IndebtednessCompany;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its common Equity Interests on a pro rata basis;
(5) repurchases of Equity Interests in a cashless transaction deemed to occur upon exercise or vesting of restricted stock, stock options or warrants;
(6) the payment of cash in lieu of the issuance of fractional shares or scrip in connection with the exercise of warrants, options or other securities convertible into or exercisable for Capital Stock of the Company;
(7) the repurchase, redemption retirement or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary Capital Stock of the Company held by any current future, present or former director, officer, employee or consultant director of the Company or any of its Restricted Subsidiaries or the estate, heirs or legatees of, or any entity controlled by, any such employee or director, pursuant to any management equity subscription agreement plan or plan, stock option plan or any other management or employee benefit plan or agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise termination of stock options such person’s employment for any reason (including by reason of death or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 milliondisability); provided, however, that at the time of, and after aggregate Restricted Payments made under this clause (7) does not exceed in any calendar year the sum of (A) $1.5 million (with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum (without giving effect to, to the following proviso) of $5.0 million in any calendar year) and (B) the cash proceeds of key man life insurance policies on the life of any such person received by the Company and its Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on Subsidiaries after the date of this Indenture; or
(8) Restricted Payments made in connection with the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computedTransactions. For purposes of determining the aggregate permissible amount of Restricted Payments in accordance with clause (3) of Section 1009(a), all amounts expended pursuant to Section 1009(b)(1) shall be included and all amounts expended or received pursuant to Sections 1009(b)(2) through (8) shall be excluded; provided, however, that amounts paid pursuant to Section 1009(b)(1) shall be included only to the extent that such amounts were not previously included in calculating Restricted Payments. If the Company or a Restricted Subsidiary makes a Restricted Payment that at the time of the making of such Restricted Payment, would be in the Company’s good faith determination permitted under the requirements of this Section 1009, such Restricted Payment shall be deemed to have been made in compliance with this Section 4.07, 1009 notwithstanding any subsequent adjustments made in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant good faith to the first paragraph Company’s financial statements affecting the calculations set forth above for any period. For the purposes of this Section 4.071009, the net proceeds from the issuance of shares of the Company’s Capital Stock upon conversion of Indebtedness shall be deemed to be an amount equal to the accreted value of such Indebtedness on the date of such conversion and the additional consideration, if any, the Company will receives upon such conversion, minus any cash payment on account of fractional shares (such consideration, if in property other than cash, to be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07determined by the Company’s Board of Directors, whose good faith determination shall be conclusive).
Appears in 1 contract
Sources: Indenture (Voom HD Holdings LLC)
Limitation on Restricted Payments. The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly:,
(1i) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which of the Company or any of its Restricted Subsidiaries is a party) Subsidiary or make any payment or distribution to the direct or indirect holders of Equity Interests of the Company’s Company or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Subsidiary (other than any dividends, distributions and payments made to the Company or any Restricted Subsidiary and dividends or distributions payable to any Person solely in Qualified Equity Interests (or in options, warrants or other than Disqualified Stock) of the Company or payable rights to the Company or a Restricted Subsidiary of the Companypurchase Qualified Equity Interests);
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct Restricted Subsidiary (other than any such Equity Interests owned by the Company or indirect parent of the Companyany Restricted Subsidiary);
(3iii) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value value, or make any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees principal payment on, prior to any scheduled maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchase, redemption, defeasance or any Subordinated Indebtedness (other acquisition of than any such Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionheld by any Restricted Subsidiary); or
(4iv) make any Restricted Investment (all such payments and other actions set forth in these clauses than Permitted Investments) (1) through (4) above being collectively referred to as “any of the foregoing, a "Restricted Payments”Payment"), unless,
(a) no Default shall have occurred and be continuing at the time of and or after giving effect to such Restricted Payment:;
(b) immediately after giving effect to such Restricted Payment, the Company would be able to Incur $1.00 of additional Indebtedness under Section 4.12(a); and
(c) immediately after giving effect to such Restricted Payment, the aggregate amount of all Restricted Payments (including the Fair Market Value of any non-cash Restricted Payment) declared or made on or after the Issue Date (excluding any Restricted Payment described in clauses (ii), (iii) or (iv) of the next paragraph) does not exceed an amount equal to the sum of the following (the "Basket"):
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2x) the Company would, Cumulative Operating Cash Flow determined at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
less (3y) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50150% of the cumulative Consolidated Net Income of the Company Interest Expense determined for the period (taken treated as one accounting period) from April 1, 2004 to commencing on the end Issue Date and ending on the last day of the Company’s most recently ended recent fiscal quarter for which internal financial statements are available at immediately preceding the time date of such Restricted Payment (or, if such Consolidated Net Income for such period which consolidated financial information of the Company is a deficit, less 100% of such deficit)required to be available, plus
(b2) 100% of the aggregate net cash proceeds received by the Company either (including x) as capital contributions to the fair market value Company after the Issue Date or (y) from the issue and sale (other than to a Subsidiary) of Qualified Equity Interests after the Issue Date (other than any Additional Assets issuance and sale of Qualified Equity Interests financed (A) directly or indirectly, using funds (I) borrowed from the Company or any Subsidiary until and to the extent acquired such borrowing is repaid or (II) contributed, extended, guaranteed or advanced by the Company or any Subsidiary (including, without limitation, in consideration respect of Equity Interests any employee stock ownership or benefit plan) or (B) the proceeds of which are used to effect any transaction permitted by clauses (ii), (iii) or (iv) of the next paragraph), plus
(3) the aggregate amount by which Indebtedness (other than any Subordinated Indebtedness) of the Company or any Restricted Subsidiary is reduced on 28 the Company's balance sheet upon the conversion or exchange (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to by a Subsidiary of the Company) subsequent to the Issue Date into Qualified Equity Interests (less the amount of any cash, or the fair value of property, distributed by the Company or any Restricted Subsidiary upon such conversion or exchange), plus
(c4) in the case of the disposition or repayment of any Investment that was treated as a Restricted Payment made after the Issue Date, an amount (to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, not included in the computation of Cumulative Operating Cash Flow) equal to the lesser of of: (ix) the cash return of capital with respect to such Investment and (y) the amount of such Investment that was treated as a Restricted Investment (Payment, in either case, less the cost of disposition, if any) and (ii) the initial amount disposition of such Restricted InvestmentInvestment and net of taxes, plus
(d5) so long as the Designation thereof was treated as a Restricted Payment made after the Issue Date, with respect to the extent that any Unrestricted Subsidiary of the Company is that has been redesignated as a Restricted Subsidiary after May 11the Issue Date in accordance with Section 4.14, 2004the Company's proportionate interest in an amount equal to the excess of (x) the total assets of such Subsidiary, valued on an aggregate basis at the lesser of book value and Fair Market Value, over (iy) the fair market value total liabilities of such Subsidiary, determined in accordance with GAAP (and provided that such amount shall not in any case exceed the Designation Amount with respect to such Restricted Subsidiary upon its Designation), minus
(6) with respect to each Subsidiary of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on Company which such Subsidiary was originally has been designated as an Unrestricted SubsidiarySubsidiary after the Issue Date in accordance with Section 4.14, the greater of (x) $0 and (y) the Designation Amount thereof (measured as of the Date of Designation). The preceding foregoing provisions will not prohibit:
prevent (1i) the payment of any dividend or distribution on, or the consummation of any irrevocable redemption of debt that is subordinate to the Notesof, Equity Interests within 60 days after the date of declaration of such dividend or distribution or the delivery giving of any irrevocable formal notice of such redemption, as the case may be, if the dividend, distribution or redemption payment on at the date of such declaration or the date giving of the formal notice of redemption, as the case may be, such payment or redemption would have complied comply with the provisions of the this Indenture;
; (2ii) the purchase, redemption, repurchase, retirement, defeasance retirement or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent (A) common equity capital contribution to the Company from any Person (other than a Subsidiary) or (B) issue and sale (other than to a Subsidiary of the CompanySubsidiary) of, Qualified Equity Interests Interests; (iii) any Investment to the extent that the consideration therefor consists of the Company net proceeds of the substantially concurrent issue and sale (other than Disqualified Stock)to a Subsidiary) of Qualified Equity Interests; (iv) the purchase, with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasanceSubordinated Indebtedness made in exchange for, redemption, repurchase, retirement or other acquisition out of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, a substantially concurrent issue and sale (other than to a Subsidiary) of, (x) Qualified Equity Interests or in exchange for, Permitted Refinancing Indebtedness;
(4y) other Subordinated Indebtedness having no stated maturity for the payment of any dividend or distribution by a Restricted Subsidiary of the Company principal thereof prior to the holders of its Equity Interests on a pro rata basis;
Maturity Date; or (5v) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million Investment in any twelve-month period;
(6) the acquisition of Equity Interests by the Company Person principally engaged in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 millionTelecommunications Business; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding Investments pursuant to this clause (9v) shall not exceed $25.0 million in the aggregate at any time outstanding; provided, further, however, that in the case of each of clauses (ii), (iii), (iv) and (v), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07arise therefrom.
Appears in 1 contract
Limitation on Restricted Payments. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger merger, consolidation, amalgamation or consolidation to which other business combination involving the Company or any of its Restricted Subsidiaries is a partySubsidiaries) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified StockShares) of the Company or payable to the Company or a Restricted Subsidiary of the CompanyGuarantor);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger merger, consolidation, amalgamation or consolidation to which other business combination involving the Company is a partyCompany) any Equity Interests of the Company or any direct or indirect parent of the Company, in each case held by Persons other than the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of the Company or any Restricted Subsidiary that is contractually subordinated to the Notes Notes, any Guarantee or the Subsidiary Guarantees prior to Proceeds Loan (excluding any scheduled repayment intercompany Indebtedness between or scheduled maturityamong the Company and any of its Restricted Subsidiaries), except a payment, purchase, redemption, defeasance payment of interest or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or no more than 90 days prior to the original Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment Investment; (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;; and
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Consolidated Coverage Ratio test set forth in the first paragraph of Section 4.094.3 (Incurrence of Indebtedness and Issuance of Preference Shares); and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 since the Issue Date (excluding Restricted Payments permitted by clauses (2), (3), (4), (65), (76) and (8) 7) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a1) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 the beginning of the first fiscal quarter commencing after the Issue Date to the end of the Company’s most recently ended fiscal quarter for which internal publicly available financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b2) 100% of the aggregate net cash proceeds received by the Company since the Issue Date (including i) as a contribution to its ordinary equity capital, (ii) from the fair market value of any Additional Assets to the extent acquired in consideration issue or sale or exercise of Equity Interests of the Company (other than Disqualified StockShares), or (iii) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock Shares or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock Shares or debt securities) sold to a Subsidiary of the Company), plus
(c3) an amount equal to the aggregate net reduction in Restricted Investments (other than any such Restricted Investment made pursuant to paragraphs (1) to (10) of the extent that next succeeding paragraph) made after the Issue Date by the Company or any Restricted Investment that was made after May 11Subsidiary and resulting from the repurchase, 2004 is sold for cash repayment or otherwise liquidated or repaid redemption of such Restricted Investments for cash, or from cash proceeds realized on the lesser sale of (i) the cash all or part of such Investment or representing a return of capital (excluding dividends) with respect to such thereto; provided, however, that the foregoing net reduction shall not exceed the amount (in respect of any Person) of the Restricted Investment previously made (less and treated as a Restricted Payment) by the cost of disposition, if any) and (ii) the initial amount of Company or any Restricted Subsidiary in such Restricted Investment, Person; plus
(d4) to the extent that any Unrestricted Subsidiary of the Company designated as such after the Issue Date is redesignated as a Restricted Subsidiary after May 11, 2004the Issue Date, the lesser of (i) the fair market value Fair Market Value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) the sum of (A) such fair market value Fair Market Value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. Subsidiary after the Issue Date and (B) the amount of any subsequent Investment by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary made (and treated as a Restricted Payment) after the Issue Date and the original date of designation; plus
(5) 50% of any dividends received in cash by the Company or a Guarantor after the Issue Date from an Unrestricted Subsidiary of the Company, to the extent that such dividends were not otherwise included in Consolidated Net Income of the Company for such period.
(b) The preceding provisions of Section 4.4(a) will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on if at the date of declaration or the date of the notice of redemption, as the case may be, dividend payment would have complied with the provisions of the this Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition making of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company Restricted Payment in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed Shares) or from the substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such salecontribution of ordinary equity capital to the Company; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition Restricted Payment will be excluded from clause (3)(b) of the preceding paragraphSection 4.4(a)(3)(b);
(3) the defeasance, redemption, repurchase, retirement repurchase or other acquisition of subordinated Indebtedness of the Company or any Guarantor Restricted Subsidiary that is contractually subordinated to the Notes, any Guarantee or the Proceeds Loan with the net cash proceeds from an a substantially concurrent incurrence of, or in exchange for, of Permitted Refinancing Indebtedness;
(4) the payment of any dividend (or, in the case of any partnership or distribution limited liability company, any similar distribution) by a Restricted Subsidiary of the Company to the holders of its such Restricted Subsidiary’s ordinary Equity Interests on a pro rata basis;
(5) the repurchase of Equity Interests deemed to occur upon the exercise of stock options or warrants to the extent such Equity Interests represent a portion of the exercise price of such stock options or warrants;
(6) the repurchase, redemption, or other acquisition for value of Share Capital of the Company or any Restricted Subsidiary of the Company representing fractional shares of such Share Capital in connection with a share dividend, distribution, share split, reverse share split, merger, consolidation, amalgamation or other business combination of the Company or such Restricted Subsidiary, in each case, permitted under this Indenture;
(7) so long as no Event of Default or Default that is not capable of cure has occurred and is continuing and no Default or Event of Default would be caused thereby, the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Shares of the Company issued on or after the Issue Date in accordance with the Consolidated Coverage Ratio described in Section 4.3 (Incurrence of Indebtedness and Issuance of Preference Shares);
(8) so long as no Event of Default or Default that is not capable of cure has occurred and is continuing and no Default or Event of Default would be caused thereby, the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or that are held by any Restricted Subsidiary member of the management of the Company held by any current or former director, officer, employee or consultant of the Company (or any of its Restricted Subsidiaries Subsidiaries) pursuant to any management equity subscription agreement or plan, stock option agreement or similar agreement or planagreement; provided provided, that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may shall not exceed $1.0 million in any twelve-month period and not more than $5.0 million in the aggregate;
(9) so long as no Event of Default or Default that is not capable of cure has occurred and is continuing and no Default or Event of Default would be caused thereby, the purchase, redemption, acquisition, cancellation or other retirement for a nominal value per right of any rights granted to all the holders of Equity Interests of the Company pursuant to any shareholders’ rights plan adopted for the purpose of protecting shareholders from unfair takeover tactics; provided that any such purchase, redemption, acquisition, cancellation or other retirement of such rights shall not be for the purpose of evading the limitations of this covenant (all as determined in good faith by the Board of Directors of the Company) and, provided further, that the aggregate price paid for all such purchased, redeemed, acquired cancelled or retired rights shall not exceed $2.0 million in any twelve-month period;the aggregate; and
(610) the acquisition so long as no Event of Equity Interests by the Company in connection with the exercise Default or Default that is not capable of stock options cure has occurred and is continuing and no Default or stock appreciation rights by way Event of cashless exercise;
(7) the purchaseDefault would be caused thereby, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at 12.5 million since the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused therebyIssue Date. The amount of all Restricted Payments (other than cash) will be the fair market value Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value Fair Market Value of any assets or securities that are required to be valued by this covenant will be determined, determined in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, good faith by the Board of Directors of the Company, whose determination shall resolution with respect thereto will be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver delivered to the Trustee along with an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis Fair Market Value. The Board of Directors’ determination must be based upon which an opinion or appraisal issued by a Qualified Expert if the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07estimated Fair Market Value thereof exceeds $10.0 million.
Appears in 1 contract
Sources: Guarantee Agreement (Central European Distribution Corp)
Limitation on Restricted Payments. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:, take any of the following actions (each, a “Restricted Payment”):
(1i) declare or pay any dividend or return of capital or make any other payment or distribution on account or in respect of the Company’s or any shares of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which Capital Stock of the Company or any of its Restricted Subsidiaries is a party) or Subsidiary to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Capital Stock, other than:
(other than 1) dividends or distributions payable in Equity Interests (other than Disqualified Stock) Qualified Capital Stock of the Company Company;
(2) dividends or distributions payable to the Company or and/or a Restricted Subsidiary Subsidiary; or
(3) dividends, distributions or returns of capital made on a pro rata basis to the CompanyCompany and its Restricted Subsidiaries, on the one hand, and minority holders of Capital Stock of a Restricted Subsidiary, on the other hand (or on a less than pro rata basis to any minority holder);
(2ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company held by Persons other than the Company or any of its Restricted Subsidiaries;
(includingiii) make any principal payment on, without limitationpurchase, in connection with defease, redeem, prepay, decrease or otherwise acquire or retire for value, prior to any merger scheduled final maturity, scheduled repayment or consolidation to which scheduled sinking fund payment, as the case may be, any Subordinated Indebtedness; or
(iv) make any Investment (other than Permitted Investments); if at the time of the Restricted Payment and immediately after giving pro forma effect thereto:
(A) a Default or an Event of Default has occurred and is continuing;
(B) the Company is not able to Incur at least U.S.$1.00 of additional Indebtedness pursuant to Section 3.9(a); or
(C) the aggregate amount (the amount expended for these purposes, if other than in cash, being the Fair Market Value of the relevant property) of the proposed Restricted Payment and all other Restricted Payments made subsequent to the Issue Date up to the date thereof will exceed the sum of:
(1) 100% of Consolidated Adjusted EBITDA of the Company from January 1, 2017 to the end of the most recent fiscal quarter for which consolidated financial information for the Company is available; less
(2) 150% of Consolidated Interest Expense of the Company from January 1, 2017 to the end of the most recent fiscal quarter for which consolidated financial information for the Company is available.
(b) Notwithstanding Section 3.10(a), this Section 3.10 does not prohibit:
(i) the payment of any dividend within 60 days after the date of declaration of such dividend if the dividend would have been permitted on the date of declaration pursuant to Section 3.10(a);
(ii) the acquisition of any shares of Capital Stock of the Company,
(1) in exchange for Qualified Capital Stock of the Company; or
(2) through the application of the net cash proceeds received by the Company from a party) any Equity Interests substantially concurrent sale of Qualified Capital Stock of the Company or any direct or indirect parent a contribution to the equity capital of the Company not representing an interest in Disqualified Capital Stock, in each case not received from a Subsidiary of the Company;
(3iii) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a paymentvoluntary prepayment, purchase, redemptiondefeasance, defeasance redemption or other acquisition or retirement for value of any such Subordinated Indebtedness solely in anticipation exchange for, or through the application of satisfying net cash proceeds of a sinking fund obligationsubstantially concurrent sale, principal installment or the Stated Maturity thereof, in each case, due within one year other than to a Subsidiary of the date of such paymentCompany, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Paymentof:
(1) Qualified Capital Stock of the Company; or
(2) Refinancing Indebtedness for such Subordinated Indebtedness;
(iv) repurchases by the Company of Capital Stock of the Company or options, warrants or other securities exercisable or convertible into Capital Stock of the Company from employees or directors of the Company or any of its Subsidiaries or their authorized representatives upon the death, disability or termination of employment or directorship of the employees or directors;
(v) the repurchase of any Subordinated Indebtedness at a purchase price not greater than 101% of the principal amount thereof in the event of a change of control pursuant to a provision no more favorable to the holders thereof than Section 3.7 hereof; provided that, prior to the repurchase the Company has made an Offer to Purchase and repurchased all Notes issued under this Indenture that were validly tendered for payment in connection with such offer to purchase;
(vi) repurchases of Capital Stock deemed to occur upon the exercise of stock options if the Capital Stock represent all or a portion of the exercise price thereof (or related withholding taxes), and Restricted Payments by the Company to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or upon the conversion or exchange of Capital Stock of the Company;
(vii) if no Default or Event of Default has occurred and is continuing, the declaration and payment of dividends to holders of any class or series of Disqualified Stock of the Company or any Restricted Subsidiary or Preferred Stock of any Restricted Subsidiary issued in accordance with Section 3.9 to the extent such payment of any redemption price or liquidation value of any such Disqualified Stock or Preferred Stock is made when due in accordance with its terms;
(viii) [Reserved]
(ix) if no Default or Event of Default has occurred and is continuing or would occur as a consequence exist after giving pro forma effect thereto, Restricted Payments in an amount which, when taken together with all Restricted Payments made pursuant to this clause (ix), does not exceed U.S.$35,000,000 (or the equivalent in other currencies); and
(x) if no Default or Event of such Default has occurred and is continuing or would exist after giving pro forma effect thereto, any other Restricted Payment;
(2) , provided that the Company would, Net Debt to EBITDA Ratio is less than 2.5 to 1.0 at the time of such Restricted Payment is made and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with thereto. In determining the aggregate amount of all other Restricted Payments made by subsequent to the Company Issue Date, amounts expended pursuant to Section 3.10(b)(i) (without duplication for the declaration of the relevant dividend) and its Restricted Subsidiaries after May 11Section 3.10(b)(iv) will be included in such calculation and amounts expended pursuant to Section 3.10(b)(ii), 2004 (excluding Section 3.10(b)(iii), Section 3.10(b)(v), Section 3.10(b)(vi), Section 3.10(b)(vii), Section 3.10(b)(ix) and Section 3.10(b)(x) will not be included in such calculation. The amount of any Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of not in cash will be the next succeeding paragraph), is less than Fair Market Value on the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time date of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11property, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) assets or securities proposed to be paid, transferred or issued by the Company or such the relevant Restricted Subsidiary, as the case may be, pursuant to the such Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.
Appears in 1 contract
Limitation on Restricted Payments. The Company will notshall not make, and will shall not permit any of its Restricted Subsidiaries toSubsidiary to make, directly or indirectly, any Restricted Payment if at the time of, and after giving effect to, the proposed Restricted Payment,
(a) a Default or Event of Default shall have occurred and be continuing,
(b) the Company could not Incur at least $1.00 of additional Debt pursuant to clause (1) of the first paragraph of Section 4.04, or
(c) the aggregate amount of that Restricted Payment and all other Restricted Payments (other than Restricted Payments during a Suspension Period and Restricted Payments made pursuant to clauses (c) through (m) of the following paragraph) declared or made after the Issue Date (the amount of any Restricted Payment, if made other than in cash, to be based upon Fair Market Value) would exceed an amount equal to the Available Amount. Notwithstanding the foregoing limitation, the Company may:
(1a) declare or pay any dividend or make any other payment or distribution dividends on account its Equity Interests within 60 days of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (includingdeclaration thereof if, without limitationon said declaration date, any payment the dividends could have been paid in connection compliance with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company)this Indenture;
(2b) purchase, redeem or otherwise repurchase, redeem, legally defease, acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company Subordinated Obligations in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with Equity Interests and other than Equity Interests issued or sold to a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any Guarantor with Subsidiary for the net cash proceeds from an incurrence ofbenefit of their employees);
(c) purchase, repurchase, redeem, legally defease, acquire or retire for value any Subordinated Obligations in exchange for, or out of the proceeds of the substantially concurrent sale of, Permitted Refinancing IndebtednessDebt;
(4d) (i) purchase, repurchase, redeem, legally defease, acquire or retire for value any Disqualified Equity Interests in exchange for, or out of the payment proceeds of any dividend the substantially concurrent sale of, Permitted Refinancing Debt or distribution by (ii) pay scheduled dividends (not constituting a return on capital) on Disqualified Equity Interests of the Company issued pursuant to and in compliance with Section 4.04;
(e) permit a Restricted Subsidiary that is not a Wholly Owned Subsidiary to pay dividends to shareholders of that Restricted Subsidiary that are not the parent of that Restricted Subsidiary, so long as the Company to or a Restricted Subsidiary that is the holders parent of its Equity Interests that Restricted Subsidiary receives dividends on a pro rata basis or on a basis that results in the receipt by the Company or a Restricted Subsidiary that is the parent of that Restricted Subsidiary of dividends or distributions of greater value than it would receive on a pro rata basis;
(5i) make cash payments in lieu of fractional shares in connection with the exercise of warrants, options or other securities convertible into Equity Interests of the Company, (ii) purchase fractional shares arising out of stock dividends, stock splits, stock combinations or business combinations or (iii) the repurchase, repurchase or redemption of rights to purchase Equity Interests of the Company issued in connection with any future shareholder rights plan of the Company;
(g) make repurchases of shares of common stock or other acquisition Equity Interests of the Company deemed to occur (A) upon the exercise, conversion or retirement for value exchange of options, warrants or other rights to purchase Equity Interests of the Company if such Equity Interests of the Company represent a portion of the exercise price thereof, (B) as a result of such shares of common stock or other Equity Interests being utilized to satisfy tax withholding obligations upon (i) the exercise of options, warrants or other rights to purchase Equity Interests of the Company or (ii) the vesting of other Equity Interests of the Company or the withholding taxes applicable to such options, warrants or other rights to purchase Equity Interests of the Company or (C) upon the cancellation of Equity Interests of the Company;
(h) repurchase Equity Interests of the Company from current or former officers, directors or employees of the Company or any of its Subsidiaries (or permitted transferees of such current or former officers, directors or employees), pursuant to the terms of agreements (including employment agreements) or plans approved by the Board of Directors under which such individuals acquire such Equity Interests; provided, however, that the aggregate amount of such repurchases shall not exceed the sum of (i) $15.0 million in any calendar year (with unused amounts in any calendar year carried over to succeeding calendar years subject to a maximum of $35.0 million in any calendar year) plus (ii) the net cash proceeds of any Equity Interests “key man” life insurance policies of the Company or any Restricted Subsidiary that have not been used to make any repurchases under this clause (h);
(i) purchase, defease or otherwise acquire or retire for value any Subordinated Obligations upon a Change of the Company held by any current or former director, officer, employee or consultant Control of the Company or an Asset Sale by the Company, to the extent required by any of its Restricted Subsidiaries agreement pursuant to any equity subscription agreement which such Subordinated Obligations were issued, but only if the Company has previously made the offer to purchase notes required under Section 4.12 or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month periodSection 4.07;
(6j) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) make other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed the greater of (x) $25.0 million200.0 million and (y) 9.0% of Consolidated Total Assets (calculated as of the last day of the fiscal quarter most recently ended prior to the time of the applicable Restricted Payment for which internal financial statements are available at such time);
(k) make other Restricted Payments, provided that after giving effect to such Restricted Payment on a Pro Forma Basis the Consolidated Net Leverage Ratio will be less than or equal to 3.75 to 1.00;
(l) make other Restricted Payments using the proceeds of a substantially concurrent offering of Equity Interests (other than Disqualified Equity Interests) of the Company; provided that such proceeds shall not be included in the Available Amount; and
(m) make payments under the Transaction Agreements; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9j) or (k), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, occur as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computedconsequence thereof. For purposes of determining compliance with this Section 4.074.05, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments permitted by this Section 4.05 or a Permitted Investment described in the preceding clauses definition of “Permitted Investments” need not be permitted solely by reference to one category of permitted Restricted Payments or Permitted Investments described in the definition of “Permitted Investments” (1or any portion thereof) through (9), or is entitled to but may be made pursuant to the first paragraph permitted in part under any combination thereof. For purposes of this Section 4.074.05, if any Restricted Payment or Investment would be permitted pursuant to one or more provisions described above and/or one or more of the exceptions contained in the definition of “Permitted Investments,” the Company will be permitted to divide or may classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment or Investment in any manner that complies with this Section 4.074.05 and may later reclassify any such Restricted Payment or Investment so long as such Restricted Payment or Investment (as so reclassified) would be permitted to be made in reliance on the applicable exception as of the date of such reclassification.
Appears in 1 contract
Limitation on Restricted Payments. The 4.12.1 Section 4.12.2 below permits the Company will to declare and pay dividends in specified circumstances. Except as provided in Section 4.12.2 below, the Company shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1a) declare or pay any dividend dividends or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which involving the Company or any of its Restricted Subsidiaries is a partySubsidiaries) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company and other than dividends or distributions payable to the Company or a Restricted Subsidiary of the Company);
(2b) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which involving the Company is a partyCompany) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3c) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of the Company or any Subsidiary that is contractually subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment Note Guarantee (excluding any intercompany Indebtedness between or scheduled maturityamong the Company and any of its Subsidiaries), except a payment, purchase, redemption, defeasance payment of interest or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or at the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4d) make any Restricted Investment Investment; (all such payments and other actions set forth in these clauses (1Sections 4.12.1(a) through (4d) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:.
(1) 4.12.2 So long as no Default or Event of Default has occurred and is continuing or would occur be caused thereby, the provisions of Section 4.12.1 will not prohibit the Company from declaring or paying dividends if on the date of each such declaration or payment:
(1) the Company and the Subsidiary Guarantors, as a consequence group, maintained a Fixed Charge Coverage Ratio in excess of such Restricted Payment10:1 for the then most recently completed four (4) quarter period for which financial statements have been prepared in accordance with this Indenture;
(2) the Company wouldand the Subsidiary Guarantors, at as a group, maintained a total Indebtedness to Consolidated EBITDA ratio of 1:1 for the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-then most recently completed four (4) quarter period, period for which financial statements have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth prepared in the first paragraph of Section 4.09accordance with this Indenture; and
(3) such all Restricted PaymentPayments, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting perioda whole, do not exceed five percent (5%) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
then most recently completed four (4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement quarter period for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control which financial statements have been prepared in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Indenture.
Appears in 1 contract
Sources: Indenture (PT Centralpertiwi Bahari)
Limitation on Restricted Payments. The (a) the Company will not, and will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly:indirectly (the payments and other actions described in the following clauses of this Section 4.06(a) being collectively called “Restricted Payments”):
(1i) declare or pay any dividend or make any other payment or distribution on account of its Equity Interests (other than dividends or distributions paid in the Company’s or any of its Restricted Subsidiaries’ Qualified Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which Interests) held by Persons other than the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct Restricted Subsidiary held by Persons other than the Company or indirect parent any of the Companyits Restricted Subsidiaries;
(3iii) make any principal payment on or with respect to, or purchaserepay, redeem, repurchase, defease or otherwise acquire or retire for value value, or make any Indebtedness that is subordinated payment on or with respect to Subordinated Debt (other than among the Notes Company and any of its Restricted Subsidiaries or the any Restricted Subsidiary Guarantees prior to and any scheduled repayment or scheduled maturity, other Restricted Subsidiaries) except a payment, purchase, redemption, defeasance or other acquisition payments of any such Indebtedness in anticipation of satisfying a sinking fund obligation, interest and principal installment or the at Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionMaturity; or
(4iv) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), than a Permitted Investment; unless, at the time of of, and after giving effect to such to, the proposed Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;,
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur period could Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Debt under Section 4.09; 4.05(a), and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made expended by the Company and its Restricted Subsidiaries for all Restricted Payments made after May 11March 26, 2004 would not, subject to paragraph (excluding Restricted Payments permitted by clauses (2c), (3), (4), (6), (7) and (8) of exceed the next succeeding paragraph), is less than the sum, without duplication, sum of:
(aA) 50% of the aggregate amount of the Consolidated Net Income (or, if the Consolidated Net Income is a loss, minus 100% of the Company for amount of the period (loss) accrued on a cumulative basis during the period, taken as one accounting period) from April 1, 2004 to beginning on the end first day of the fiscal quarter in which the Issue Date occurs and ending on the last day of the Company’s most recently ended completed fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), available; plus
(bB) 100% of subject to paragraph (c), the aggregate net cash proceeds received by the Company (other than from a Subsidiary) after the Issue Date:
(i) from the issuance and sale of its Qualified Equity Interests, including the fair market value by way of any Additional Assets issuance of its Disqualified Equity Interests or Debt to the extent acquired in consideration of since converted into Qualified Equity Interests of the Company (other than Disqualified Stockbut excluding any Qualified Equity Interests to the extent issued in or in connection with the proposed exchange offer or offering described in the Form S-4), or
(ii) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), equity; plus
(cC) an amount equal to the extent that any Restricted Investment that was made after May 11sum, 2004 is sold for cash or otherwise liquidated or repaid for cashall Unrestricted Subsidiaries, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibitfollowing:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.
Appears in 1 contract
Sources: Indenture (Foster Wheeler Inc)
Limitation on Restricted Payments. (a) The Company will notshall not make, and will shall not permit any of its Restricted Subsidiaries toSubsidiary to make, directly or indirectly, any Restricted Payment if at the time of, and after giving effect to, such proposed Restricted Payment:
(1) declare a Default or pay Event of Default shall have occurred and be continuing;
(2) the Company could not incur at least $1.00 of additional Debt pursuant to clause (1) of Section 4.06(a); or
(3) the aggregate amount of such Restricted Payment and all other Restricted Payments declared or made since the Issue Date (the amount of any dividend or make any Restricted Payment, if made other payment or distribution on account than in cash, to be based upon Fair Market Value) would exceed the sum of
(A) 100% of the Company’s or any 's Cumulative Consolidated EBITDA minus 1.4 times the Company's Cumulative Consolidated Interest Expense, plus
(B) 100% of its Restricted Subsidiaries’ Equity Interests the aggregate net proceeds (includingafter deduction of fees, without limitationexpenses, any payment discounts and commissions incurred in connection with issuance and sale) and the Fair Market Value of securities or other Property received by the Company from the issue or sale, after the Issue Date, of Capital Stock (other than Disqualified Capital Stock of the Company or Capital Stock of the Company issued to any merger or consolidation to which Restricted Subsidiary of the Company) of the Company or any of its Restricted Subsidiaries is a party) Debt or to the direct or indirect holders other securities of the Company’s Company convertible into or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends exercisable or distributions payable in Equity Interests exchangeable for Capital Stock (other than Disqualified Capital Stock) of the Company which have been so converted or payable to exercised or exchanged, as the case may be, plus
(C) $10.0 million.
(b) Notwithstanding the foregoing limitation, the Company or a Restricted Subsidiary may:
(1) pay dividends on its Capital Stock within 60 days of the Company)declaration thereof if, on said declaration date, such dividends could have been paid in compliance with this Indenture; PROVIDED, HOWEVER, that such dividend shall be included in the calculation of the amount of Restricted Payments;
(2) purchase, redeem or otherwise repurchase, redeem, legally defease, acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a partyx) any Equity Interests Capital Stock of the Company or any direct Subordinated Obligations in exchange for, or indirect parent out of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year proceeds of the date of such paymentsubstantially concurrent sale of, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests Capital Stock of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (Capital Stock and other than Disqualified Stock) Capital Stock issued or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (iiy) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests Disqualified Capital Stock of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale of (other than to a Subsidiary of the Company) of, Equity Interests Disqualified Capital Stock of the Company that has a redemption date, and requires the payment of current dividends in cash, no earlier than the Disqualified Capital Stock being purchased, redeemed or otherwise acquired or retired; PROVIDED, HOWEVER, that
(other than Disqualified Stock), with a sale being deemed substantially concurrent if A) such redemptionpurchase, repurchase, retirementredemption, defeasance legal defeasance, acquisition or acquisition occurs not more than 120 days after such sale; provided that retirement shall be excluded in the calculation of the amount of any Restricted Payments and
(B) the Capital Stock Sale Proceeds from such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance exchange or other acquisition will sale shall be excluded from the calculation pursuant to clause (3)(ba)(3)(B) of the preceding paragraphabove;
(3) the defeasance, redemptionpurchase, repurchase, retirement redeem, legally defease, acquire or retire for value (i) any Subordinated Obligations (other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or than Existing Preferred Stock) in exchange for, Permitted or out of the proceeds of the substantially concurrent sale of, Refinancing IndebtednessDebt or (ii) any 12 1/2% Cumulative Exchangeable Preferred Stock in exchange for 12 1/2% Exchange Debentures which 12 1/2% Exchange Debentures are substantially concurrently refinanced with Debt permitted under clause (n) of the definition of "PERMITTED DEBT"; PROVIDED, HOWEVER, that such purchase, repurchase, redemption, legal defeasance, acquisition or retirement shall be excluded in the calculation of the amount of Restricted Payments;
(4) the payment of any dividend repurchase shares of, or distribution by a Restricted Subsidiary of the Company options to the holders of its Equity Interests on a pro rata basis;
(5) the repurchasepurchase shares of, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant common stock of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement from current or planformer officers, stock option agreement directors or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness employees of the Company or any Restricted Subsidiary of its Subsidiaries (a) at a purchase price not greater than 101.0% or permitted transferees of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 such current or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided thatformer officers, prior to directors or simultaneously with such purchaseemployees), repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect pursuant to the Notes and has completed terms of agreements (including employment agreements) or plans (or amendments thereto) approved by the repurchase Board of Directors under which such individuals purchase or redemption sell, or are granted the option to purchase or sell, shares of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;common stock; PROVIDED, HOWEVER, that:
(8) A) the payment aggregate amount of cash such repurchases shall not exceed $1.0 million in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; orcalendar year and
(9B) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9)of such repurchase, no other Default or Event of Default shall have occurred and be continuing (or would result therefrom); PROVIDED FURTHER, HOWEVER, that such repurchases shall be caused thereby. The included in the calculation of the amount of all Restricted Payments Payments;
(other than cash5) will be the fair market as long as no Default or Event of Default has occurred and is continuing, purchase, repurchase, redeem, legally defease, acquire or retire for value on the date of the Restricted Payment of the asset(s) outstanding Preferred Stock in exchange for, or securities proposed to be transferred or issued out of, consideration received by the Company or any Restricted Subsidiary from any Spectrum Sale as permitted under Section 4.10; PROVIDED, HOWEVER, that such purchase, repurchase, redemption, legal defeasance, acquisition or retirement shall be excluded in the calculation of the amount of Restricted SubsidiaryPayments;
(6) as long as no Default or Event of Default has occurred and is continuing, as pay cash dividends (not constituting a return of capital) on the case may be, pursuant Existing Preferred Stock under the terms related to the payment of dividends on the Existing Preferred Stock as in effect on the Issue Date and described under "Description of Material Indebtedness and Preferred Stock" in the Offering Memorandum; PROVIDED, HOWEVER, that any cash dividends paid with respect to the Existing Preferred Stock shall reduce amounts otherwise available for Restricted Payment. The fair market value of Payments; and PROVIDED FURTHER, HOWEVER, in no event shall any assets or securities that are such cash dividend be paid at any time when the Company is permitted to pay a dividend on such stock otherwise than in cash, unless the Company would be required to be valued by this covenant will be determined, pay such non-cash dividends at a rate higher than that applicable to cash dividends;
(7) pay dividends on Disqualified Capital Stock solely in additional shares of Disqualified Capital Stock;
(8) make Restricted Payments in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts aggregate of $50.0 million 15.0 million; and
(9) make distributions or more, by the Board payments of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Receivables Fees.
(c) Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2)Payment, (3), (4), (6), (7) or (8)) the Company will shall deliver to the Trustee an Officers’ ' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 4.08 were computed. For purposes , which calculations may be based upon the Company's latest available financial statements, and that no Default or Event of determining compliance with this Section 4.07, in the event that a Default exists and is continuing and no Default or Event of Default will occur immediately after giving effect to any Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Payments.
Appears in 1 contract
Limitation on Restricted Payments. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, take the following actions:
(1i) declare or pay any dividend on, or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitationto holders of, any payment in connection with any merger or consolidation to which shares of Capital Stock of the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Subsidiary (other than dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) shares of Qualified Capital Stock of the Company or payable in options, warrants or other rights to the Company or a Restricted Subsidiary purchase Qualified Capital Stock of the Company);
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct or indirect parent Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company);
(3iii) make any principal payment on or with respect to, or purchaserepurchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled repayment principal payment, scheduled sinking fund payment or scheduled maturity, any Subordinated Indebtedness (excluding any intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries), except a payment, purchase, redemption, defeasance or other acquisition of in any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year case out of the date proceeds of such paymentPermitted Refinancing Indebtedness, purchase, redemption, defeasance or other acquisition; or
(4iv) make any Restricted Investment Investment; (all such payments and or other actions set forth described in these clauses (1i) through (4iv) above being collectively referred to as “Restricted Payments”), unless, unless at the time of and after giving effect to such the proposed Restricted Payment:
(1) no Default or Event of Default has shall have occurred and is continuing or would occur as a consequence of such Restricted Paymentbe continuing;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of accordance with Section 4.099.12(a) hereof; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made by the Company and its Restricted Subsidiaries after May 11January 1, 2004 shall not exceed the sum (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7without duplication) and (8) of the next succeeding paragraph), is less than the sum, without duplication, offollowing:
(aA) 50% of the Consolidated Net Income of the Company for accrued on a cumulative basis during the period (taken as one accounting period) from April beginning on January 1, 2004 to and ending on the end last day of the Company’s most recently ended last fiscal quarter for which internal financial statements are available at ending prior to the time date of such proposed Restricted Payment (or, if such Consolidated Net Income for such period is shall be a deficitloss, less minus 100% of such deficitloss), ; plus
(bB) 100% of the aggregate net cash proceeds Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after January 1, 2004 by the Company from the issuance or sale (including other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the fair market value Company or any options, warrants or rights to purchase such shares of any Additional Assets to Qualified Capital Stock of the extent acquired in consideration Company; plus
(C) the aggregate Net Cash Proceeds, or the Fair Market Value of Equity Interests of Property other than cash, received after January 1, 2004 by the Company (other than Disqualified Stock)from any of its Restricted Subsidiaries) since May 11upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company; plus
(D) the aggregate Net Cash Proceeds received after January 1, 2004 as a contribution to its common equity capital or by the Company from the issue issuance or sale of Equity Interests of the Company (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Capital Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Qualified Capital Stock or debt securities) sold to a Subsidiary of the Company), together with the aggregate cash received by the Company at the time of such conversion or exchange; plus
(cE) to the extent that any not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Investment that was made Subsidiary after May 11January 1, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that from any Unrestricted Subsidiary or from the redesignation of the Company is redesignated an Unrestricted Subsidiary as a Restricted Subsidiary after May 11(valued in each case as provided in the definition of “Investment”), 2004, not to exceed in the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment case of any dividend or distribution or Unrestricted Subsidiary the consummation total amount of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale Investments (other than to a Permitted Investments) in such Unrestricted Subsidiary of the Company) of, Equity Interests of made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after January 1, 2004.
(other than Disqualified Stockb) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (3), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
), (5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
and (7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (abelow) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing continuing:
(1) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above);
(2) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company;
(3) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company;
(4) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company;
(5) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (a) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (b) such new Indebtedness is subordinated to the Notes at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (c) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Notes and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the Stated Maturity for the final scheduled principal payment of the Notes;
(6) loans made to officers, directors or employees of the Company or any Restricted Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (a) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options, or (b) to refinance loans, together with accrued interest thereon, made pursuant to item (a) of this clause (6); and
(7) other Restricted Payments in an aggregate amount not to exceed $10,000,000. The actions described in clauses (1), (3), (4) and (6) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be caused thereby. available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (1) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (1)), and the actions described in clauses (2), (5) and (7) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a).
(c) The amount of all Restricted Payments (other than cash) will be the fair market value Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value .
(d) In computing Consolidated Net Income under paragraph (a) above, (1) the Company shall use audited financial statements for the portions of any assets or securities that the relevant period for which audited financial statements are required to be valued by this covenant will be determined, in available on the case date of amounts under $50.0 million, by an officer determination and unaudited financial statements and other current financial data based on the books and records of the Company and, for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the case of amounts of $50.0 million or more, by financial statements and other financial data derived from the Board of Directors books and records of the Company, whose determination shall be evidenced by a Board Resolution. Not later than Company that are available on the date of making any determination. If the Company makes a Restricted Payment (excluding any Restricted Payment described in which, at the preceding clause (2), (3), (4), (6), (7) or (8)) time of the Company will deliver to the Trustee an Officers’ Certificate stating that making of such Restricted Payment is would in the good faith determination of the Company be permitted and setting forth under the basis upon which the calculations required by requirements of this Section 4.07 were computed. For purposes of determining Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Section 4.07, Indenture notwithstanding any subsequent adjustments made in good faith to the event that a Restricted Payment meets the criteria of more than one Company’s financial statements affecting Consolidated Net Income of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in for any manner that complies with this Section 4.07period.
Appears in 1 contract
Sources: Third Supplemental Indenture (Comstock Oil & Gas GP, LLC)
Limitation on Restricted Payments. The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
: (1i) declare or pay any dividend or make any other payment or distribution on account of the Company’s 's or any of its Restricted Subsidiaries’ ' Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which involving the Company or any of its Restricted Subsidiaries is a partyCompany) or to the direct or indirect holders of the Company’s 's or any of its Restricted Subsidiaries’ ' Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
; (2ii) purchase, redeem or otherwise acquire or retire for value (including, including without limitation, in connection with any merger or consolidation to which involving the Company is a partyCompany) any Equity Interests of the Company or any direct or indirect parent of the Company;
; (3iii) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturitySubordinated Indebtedness, except a payment, purchase, redemption, defeasance payment of interest or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment at Stated Maturity; or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4iv) make any Restricted Investment (all such payments and other actions set forth in these clauses (1i) through (4iv) above being collectively referred to as “"Restricted Payments”"), unless, at the time of and after giving effect to such Restricted Payment:
(1a) no Default or Event of Default has shall have occurred and is be continuing or would occur as a consequence of such Restricted Payment;thereof; and
(2b) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.094.08 hereof; and
(3c) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries on or after May 11, 2004 the date hereof (excluding Restricted Payments permitted by clauses (2ii), (3iii), (4), (6), (7iv) and (8) v) (but only to the extent of the dividends paid to the Company or its Wholly Owned Restricted Subsidiaries pursuant to such clause (v)) of the next succeeding paragraph), is less than the sum, without duplication, of:
sum of (ai) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 the beginning of the first fiscal quarter commencing after the date hereof to the end of the Company’s 's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
plus (bii) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale since the date hereof of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or convertible debt securities) sold to a Subsidiary of the CompanyCompany and other than Disqualified Stock or debt securities that have been converted into Disqualified Stock), plus
plus (ciii) to the extent that any Restricted Investment that was made after May 11, 2004 the date hereof is sold for cash or otherwise liquidated or repaid for cash, the lesser of (iA) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (iiB) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of . The foregoing provisions shall not prohibit (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may bethereof, if the dividend, distribution or redemption payment on the at said date of declaration or the date of the notice of redemption, as the case may be, such payment would have complied with the provisions hereof; (ii) so long as no Default or Event of the Indenture;
(2) Default shall have occurred and be continuing, the redemption, repurchase, retirementdefeasance, defeasance retirement or other acquisition of any subordinated Subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of, the substantially concurrent sale (other than to a Subsidiary of the Company) of other Equity Interests of the Company (other than any Disqualified Stock); provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, defeasance, retirement or other acquisition shall be excluded from clause (c)(ii) of the preceding paragraph; (iii) so long as no Default or Event of Default shall have occurred and be continuing, the redemption, repurchase, defeasance, retirement or other acquisition of any Subordinated Indebtedness with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness; (iv) so long as no Default or Event of Default shall have occurred and be continuing, the retirement of any shares of Disqualified Stock by conversion into, or by exchange for, shares of Disqualified Stock, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than shares of Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that (a) such Disqualified Stock is not subject to mandatory redemption earlier than the maturity of the Notes, (b) such Disqualified Stock is in an aggregate liquidation preference that is equal to or less than the sum of (x) the aggregate liquidation preference of the Disqualified Stock being retired, (y) the amount of accrued and unpaid dividends, if any, and premiums owed, if any, on the Disqualified Stock being retired and (z) the amount of customary fees, expenses and costs related to the incurrence of such Disqualified Stock and (c) such Disqualified Stock is incurred by the same Person that initially incurred the Disqualified Stock being retired, except that the Company may incur Disqualified Stock to refund or refinance Disqualified Stock of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) Wholly Owned Subsidiary of the preceding paragraph;
Company; (3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4v) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
; (5vi) the payment of cash dividends on the Existing Preferred Stock when such dividends are required to be paid in accordance with the Certificate of Designation with respect to the Existing Preferred Stock; (vii) so long as no Default or Event of Default shall have occurred and be continuing, the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant member of the Company Company's (or any of its Restricted Subsidiaries Subsidiaries') management pursuant to any management equity subscription agreement or plan, stock option agreement or similar agreement or planin effect as of the date hereof; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may shall not exceed $2.0 million 300,000 in any twelve-month period;
; (6viii) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, so long as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing continuing, repurchases of Equity Interests deemed to occur upon the exercise of stock options or warrants upon surrender of Equity Interests to pay the exercise price of such stock options or warrants; and (ix) so long as no Default or Event of Default shall have occurred and be continuing, other Restricted Payments in an aggregate amount not to exceed $1.0 million since the date hereof. The Board of Directors may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if such designation would not cause a Default; provided that in no event shall the business currently operated by AmeriTel, ▇▇▇▇▇▇ Telecommunications, ▇▇▇▇▇▇ of Carolina or ▇▇▇▇▇▇ STC be transferred to or held by any Subsidiary other than a Wholly Owned Restricted Subsidiary. For purposes of making such determination, all outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid in cash) in the Subsidiary so designated will be deemed to be Restricted Payments at the time of such designation and will reduce the amount available for Restricted Payments under the first paragraph of this covenant. All such outstanding Investments will be deemed to constitute Investments in an amount equal to the greatest of (x) the net book value of such Investments at the time of such designation, (y) the fair market value of such Investments at the time of such designation and (z) the original fair market value of such Investments at the time they were made. Such designation will only be permitted if such Restricted Payment would be caused therebypermitted at such time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The amount of all Restricted Payments (other than cash) will shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to non-cash Restricted Payment shall be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, determined by the Board of Directors of the Company, whose determination resolution with respect thereto shall be evidenced delivered to the Trustee, such determination to be based upon an opinion or appraisal issued by a Board Resolutionan accounting, appraisal or investment banking firm of national standing if such fair market value exceeds $5.0 million. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2)Payment, (3), (4), (6), (7) or (8)) the Company will shall deliver to the Trustee an Officers’ ' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes , and that no Default or Event of determining compliance Default will result from making the Restricted Payment, together with a copy of any fairness opinion or appraisal required by this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Indenture.
Appears in 1 contract
Sources: Indenture (Talton Invision Inc)
Limitation on Restricted Payments. The Company will notnot make, and will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, make, any Restricted Payment, unless:
(1a) declare no Default or pay any dividend or make any other payment or distribution on account Event of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments Default shall have occurred and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, be continuing at the time of and or immediately after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2b) the Company would, at the time of such Restricted Payment and immediately after giving pro forma effect thereto as if to such Restricted Payment had been made at Payment, the beginning of the applicable four-quarter period, have been permitted to Company could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of (other than Permitted Indebtedness) under Section 4.094.10; and
(3c) immediately after giving effect to such Restricted Payment, together with the aggregate of all Restricted Payments declared or made after the Existing Notes Issue Date does not exceed the sum of (without duplication):
(1) 100% of the Company’s Cumulative EBITDA minus 1.4 times the Company’s Cumulative Consolidated Interest Expense; plus
(2) 100% of the aggregate Net Proceeds and the fair market value of securities or other property received by the Company, after January 1, 2001, from (a) the issue or sale of Capital Stock (other than Disqualified Capital Stock or Capital Stock of the Company issued to any Subsidiary of the Company) of the Company or any Indebtedness or other securities of the Company convertible into or exercisable or exchangeable for Capital Stock (other than Disqualified Capital Stock) of the Company which has been so converted or exercised or exchanged, as the case may be, (b) any capital contribution to the Company from Parent (except as contemplated by clause (vi) of the following paragraph), and (c) any loans made to the Company by Parent prior to the Existing Notes Issue Date upon the cancellation of such loans by Parent; plus
(3) the net reductions in Investments (other than reductions in Permitted Investments) in any Person resulting from payments of interest on Indebtedness, dividends, repayments of loans, partial or total releases or discharges of Guaranteed Permitted Unrestricted Subsidiary Obligations, or from designations of Unrestricted Subsidiaries as Restricted Subsidiaries, valued in each case at the fair market value thereof, not to exceed the amount of all other Restricted Payments Investments previously made by the Company and its Restricted Subsidiaries in such Person. For purposes of determining under this clause (c) the amount expended for Restricted Payments, cash distributed shall be valued at the face amount thereof and property other than cash shall be valued at its fair market value as determined by the Board of Directors of the Company reasonably and in good faith. Notwithstanding the foregoing, the Company and any of the Restricted Subsidiaries may pay any dividend or make any distribution to the Parent for the purpose of funding a payment of any dividend or making of any distribution on or in respect of shares of the Parent’s Capital Stock, in the case of each such dividend or distribution by the Company or any of the Restricted Subsidiaries constituting a Restricted Payment, to the extent that the Parent believes in good faith that it qualifies as a “real estate investment trust” under Section 856 of the Code (or any successor provision) and that the declaration or payment of a dividend or making of a distribution in such amount is necessary to maintain the Parent’s status as a REIT for any taxable year, with such dividend to be paid or distribution to be made as and when determined by the Parent, whether during or after May 11the end of the relevant taxable year; provided, 2004 however, that (excluding Restricted Payments permitted by clauses (2i) at the time of, and after giving effect to, any such dividend or distribution, no Event of Default under Section 6.01(1), (3), 2) (4without giving effect to the grace period set forth therein), (6), ) or (7) shall have occurred and (8) be continuing or would occur as a consequence thereof and the obligations in respect of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that notes shall not otherwise have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) accelerated and (ii) two consecutive dividends or distributions pursuant to this paragraph shall not be permitted during the initial amount pendency of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary single Event of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted SubsidiaryDefault. The preceding provisions will of this Section 4.11 shall not prohibit:
(1i) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may bethereof, if the dividend, distribution or redemption payment on the at such date of declaration or the date of the notice of redemption, as the case may be, such payment would have complied comply with the provisions of this Indenture; provided, however, that in calculating the Indentureaggregate amount of Restricted Payments for purposes of Section 4.11(c), such amounts declared shall be included in the calculation but such amounts expended shall be excluded from the calculation;
(2ii) the redemption, repurchase, retirement, defeasance or other acquisition retirement of any subordinated shares of Capital Stock of the Company or Indebtedness of the Company which is subordinated or any Guarantor pari passu in right of payment to the Notes by conversion into, or of any Equity Interests of the Company by or in exchange for, shares of Capital Stock (other than Disqualified Capital Stock), or out of the net cash proceeds Net Proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of other shares of Capital Stock of the Company (other than Disqualified Capital Stock); provided, with a sale being deemed substantially concurrent if such redemptionhowever, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds Net Proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will retirement shall be excluded from clause (3)(bc)(2) of this Section 4.11, provided further, however, that in calculating the preceding paragraphaggregate amount of Restricted Payments for purposes of Section 4.11(c), amounts expended pursuant to this clause (ii) shall be excluded from the calculation;
(3iii) the defeasance, redemption, repurchase, redemption or retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with which is subordinated in right of payment to the net cash proceeds from an incurrence of, or Notes in exchange for, Permitted Refinancing Indebtednessby conversion into, or out of the Net Proceeds of, a substantially concurrent sale or incurrence of Indebtedness (it being understood that a redemption or retirement or irrevocable deposit for redemption or retirement of Indebtedness within 45 days of such sale or incurrence shall be deemed “substantially concurrent”) of the Company (other than any Indebtedness owed to a Subsidiary of the Company) that is, contractually subordinated in right of payment to the Notes to at least the same extent as the subordinated Indebtedness being redeemed or retired and (x) has a Stated Maturity no earlier than the final maturity date of the Indebtedness being redeemed or retired and (y) has an Average Life to Stated Maturity equal to or greater than the remaining Average Life to Stated Maturity of the Indebtedness being redeemed or retired; provided, however, that the amount of any such Net Proceeds that are utilized for any such redemption or retirement shall be excluded from clause (c)(2) of this Section 4.11, provided further, however, that in calculating the aggregate amount of Restricted Payments for purposes of Section 4.11(c) amounts expended pursuant to this clause (iii) shall be excluded from the calculation;
(4iv) the funding of loans (but not including the forgiveness of any such loan) to executive officers, directors and shareholders for relocation loans, bonus advances and other purposes consistent with past practices or the purchase, redemption or other acquisition for value of shares of Capital Stock of the Parent or the Company (other than Disqualified Capital Stock) or options on such shares held by the Parent’s or the Company’s or the Restricted Subsidiaries’ officers or employees or former officers or employees (or their estates or trusts or beneficiaries under their estates or trusts for the benefit of such beneficiaries) upon the death, disability, retirement or termination of employment of such current or former officers or employees pursuant to the terms of an employee benefit plan or any other agreement pursuant to which such shares of Capital Stock or options were issued or pursuant to a severance, buy-sell or right of first refusal agreement with such current or former officer or employee; provided that the aggregate amount of any such loans funded and cash consideration paid, or distributions made, pursuant to this clause (iv) do not in any one fiscal year exceed $7.0 million; provided further, however, that in calculating the aggregate amount of Restricted Payments for purposes of Section 4.11(c), amounts expended pursuant to this clause (iv) shall be excluded from the calculation;
(v) the making of Investments in Unrestricted Subsidiaries and joint ventures in an aggregate amount not to exceed since the Issue Date the greater of (A) $500.0 million and (B) 8% of the Company’s Total Assets (plus, so long as the condition set forth in Section 4.11(b) is satisfied at such time, an additional $50.0 million); provided, however, that in calculating the aggregate amount of Restricted Payments made subsequent to the Issue Date for purposes of Section 4.11(c), amounts expended pursuant to this clause (v) shall be excluded in the calculation;
(vi) distributions by the Company to Parent to permit Parent to pay obligations actually incurred by Parent in respect of the payment of any dividend or distribution by a Restricted Subsidiary operating expenses of the Company or the Restricted Subsidiaries in an aggregate amount in any fiscal year not to exceed 5% of the holders total operating expenses of its Equity Interests the Company and the Restricted Subsidiaries on a pro rata basisconsolidated basis determined in accordance with GAAP and Tax Payments permitted by Section 4.14(b)(v); provided, however, that in calculating the aggregate amount of Restricted Payments for purposes of Section 4.11(c), amounts expended pursuant to this clause (vi) shall be excluded from the calculation;
(5vii) other Restricted Payments in an aggregate amount not to exceed $20.0 million in the aggregate; provided, however, that in calculating the aggregate amount of Restricted Payments made subsequent to the Issue Date for purposes of Section 4.11(c), amounts expended pursuant to this clause (vii) shall be excluded in the calculation; and
(viii) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests Indebtedness that is contractually subordinated in right of payment to the Company Notes and the Guarantees in accordance with Sections 4.13 and 4.19; provided, however, that all Notes tendered in connection with a Change of Control Offer or Excess Proceeds Offer, as applicable, have been repurchased, redeemed or acquired for value prior to any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries Payment being made pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or planthis clause (viii); provided further, however, that in calculating the aggregate price paid amount of Restricted Payments for all such repurchasedpurposes of Section 4.11(c), redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month periodamounts expended pursuant to this clause (viii) shall be excluded from the calculation;
(6ix) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchasedefeasance, redemption, repurchase, redemption, defeasance retirement or other acquisition or retirement for value of Indebtedness that is contractually subordinated Indebtedness in right of payment to the Company or any Restricted Subsidiary (a) Notes if, at a purchase price not greater than 101.0% the time of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided thatsuch defeasance, prior to or simultaneously with such purchaseredemption, repurchase, redemption, defeasance retirement or other acquisition or retirementretirement and after giving effect thereto, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect Secured Leverage Ratio would be less than 4.5 to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million1.0; provided, however, that at in calculating the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The aggregate amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9made for purposes of Section 4.11(c), or is entitled to be made amounts expended pursuant to this clause (ix) shall be excluded from the first paragraph of this Section 4.07calculation; and
(x) any consideration, the Company will be permitted to divide payment, dividend, distribution or classify (or later divided or classify or reclassify other transfer in whole or in part in its sole discretion) such Restricted Payment in any manner that complies connection with this Section 4.07a Permitted Securitization Financing.
Appears in 1 contract
Sources: Indenture (Lamar Advertising Co/New)
Limitation on Restricted Payments. (i) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly:
indirectly (1a) declare or pay any dividend on, or make any other payment or distribution on account in respect of, any Capital Stock of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than except for dividends or distributions payable solely in Equity Interests Capital Stock of the Company (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
; (2b) purchase, redeem redeem, retire or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct or indirect parent Affiliate of the Company;
Company (3other than a Restricted Subsidiary); (c) make any principal payment on or with respect topurchase, or purchaserepurchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchase, redemption, defeasance or any Subordinated Obligation (other acquisition of any such Indebtedness than in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereoffinal maturity, in each case, due within one year of the date of acquisition); or (d) make any Investment (other than Permitted Investments) in any Person, (any such paymentdividend, distribution, purchase, redemption, defeasance or repurchase, defeasance, other acquisition; or
(4) make any Restricted , retirement or Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively herein referred to as “a "Restricted Payments”), unless, Payment") if at the time of and after giving effect to such the proposed Restricted Payment:
(1) no any Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Paymentcontinuing;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur could not Incur at least $1.00 of additional Indebtedness pursuant to clause (i) of the Fixed Charge Coverage Ratio test set forth in the first paragraph definition of Section 4.09Permitted Indebtedness; andor
(3) such Restricted Payment, together with the aggregate amount of expended or declared for all other Restricted Payments made by after the Company and its Restricted Subsidiaries after May 11, 2004 Issue Date exceeds (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, ) the sum of:
(aA) 50% of the Consolidated Net Income of the Company for accrued during the period (taken treated as one accounting period) from April 1, 2004 the first day of the fiscal quarter in which the Issue Date occurs to the end of the Company’s most recently ended recent fiscal quarter for which internal financial statements are available ending at least 45 days prior to the time date of such Restricted Payment (or, if in case such Consolidated Net Income for such period is shall be a deficit, less minus 100% of such deficit)) and minus 100% of the amount of any write-downs, pluswrite-offs, other negative revaluations and other negative extraordinary charges not otherwise reflected in Consolidated Net Income during such period;
(bB) 100% of the aggregate net cash proceeds Net Cash Proceeds received by the Company from the issuance or sale of its Capital Stock (including other than Disqualified Stock) subsequent to the fair market value Issue Date (other than an issuance or a sale to a Subsidiary of the Company or an employee stock ownership plan or trust);
(C) the amount by which Indebtedness of the Company or its Restricted Subsidiaries is reduced on the Company's balance sheet upon the conversion or exchange (other than by a Subsidiary) subsequent to the Issue Date, of any Additional Assets Indebtedness of the Company or its Restricted Subsidiaries convertible or exchangeable for Capital Stock (other than Disqualified Stock) of the Company;
(D) an amount equal to the net reduction in Investments resulting from dividends, repayments of loans or advances or other transfers of assets (to the extent acquired not included in consideration Consolidated Net Income), in each case, to the Company or any Restricted Subsidiary, not to exceed the amount of Equity Interests Investments previously made that were included as Restricted Payments; and
(E) $40 million.
(ii) The provisions of Section 4.04(i) shall not prevent the Company from:
(a) paying a dividend on its Capital Stock within 60 days after the declaration thereof, if, on the declaration date, the Company could have paid such dividend in compliance with this Indenture;
(b) redeeming, repurchasing, defeasing, acquiring or retiring for value Subordinated Obligations from proceeds of Refinancing Indebtedness permitted by clause (xi) of the definition of Permitted Indebtedness;
(c) acquiring, redeeming or retiring Capital Stock or Subordinated Obligations of the Company in exchange for, or in connection with a substantially concurrent issuance of, Capital Stock of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus; and
(d) repurchasing or redeeming shares of, or options to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11purchase shares of, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness Capital Stock of the Company or any Guarantor stock appreciation rights from officers, directors and employees (or the heirs of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Companysuch persons) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary whose employment has terminated or who have died or retired or become disabled or upon the vesting of stock appreciation rights, so long as the aggregate amount of such payments in any fiscal year does not exceed $5 million.
(iii) Payments made pursuant to Sections 4.04(ii)(b) and (c) shall be excluded from the calculation of the amount available for Restricted Payments, provided that the proceeds from the issuance of Capital Stock of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that Section 4.04(ii)(c) shall not increase the aggregate price paid amount available for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Payments.
Appears in 1 contract
Limitation on Restricted Payments. (a) The Company will not, and will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly:
(1i) declare or pay any dividend on, or make any other payment or distribution on account to holders of, any shares of the Company’s or any Capital Stock of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Subsidiary (other than dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) shares of Qualified Capital Stock of the Company or payable in options, warrants or other rights to acquire such shares of Qualified Capital Stock) (other than the declaration or payment of dividends or distributions to the extent declared or paid to the Company or a any Restricted Subsidiary of the CompanySubsidiary);
(2ii) purchase, redeem or otherwise acquire or retire for value (includingvalue, without limitationdirectly or indirectly, in connection with any merger or consolidation to which the Company is a party) any Equity Interests shares of Capital Stock of the Company or any direct or indirect parent Affiliate of the CompanyCompany (other than Capital Stock of any Wholly Owned Restricted Subsidiary) or any options, warrants or other rights to acquire such shares of Capital Stock;
(3iii) make any principal payment on or with respect toon, or purchaserepurchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled repayment principal payment, sinking fund payment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07Subsidiary; or
(9iv) make any Investment (other than any Permitted Investment) in any Person (such payments or other actions described in (but not excluded from) clauses (i) through (iv) are collectively referred to as "Restricted Payments in an aggregate amount since May 11Payments"), 2004 not to exceed $25.0 million; provided, however, that unless at the time of, and immediately after giving effect to, any the proposed Restricted Payment permitted under (the preceding clause amount of any such Restricted
(9), 1) no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The continuing, (2) the Company could incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to Section 1008 and (3) the aggregate amount of all Restricted Payments declared or made after the Issuance Date shall not exceed the sum of:
(A) 50% of the Consolidated Adjusted Net Income of the Company accrued on a cumulative basis during the period beginning on the Issuance Date and ending on the last day of the Company's last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such aggregate cumulative Consolidated Adjusted Net Income shall be a loss, minus 100% of such loss), PLUS
(B) the aggregate net cash proceeds received after the Issuance Date by the Company from the issuance or sale (other than to any Subsidiary) of shares of Qualified Capital Stock of the Company (including upon the exercise of options, warrants or rights) or warrants, options or rights to purchase shares of Qualified Capital Stock of the Company, PLUS
(C) the aggregate net cash proceeds received after the Issuance Date by the Company from the issuance or sale (other than to any Subsidiary) of debt securities or Redeemable Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, to the extent such securities were originally sold for cash, together with the aggregate net cash proceeds received by the Company (other than from a Subsidiary) will be in connection with such conversion or exchange, PLUS
(D) to the fair market value on extent that any Investment constituting a Restricted Payment that was made after the Issuance Date is sold or is otherwise liquidated or repaid, an amount (to the extent not included in Consolidated Adjusted Net Income) equal to the lesser of (x) the cash proceeds with respect to such Investment (less the cost of the disposition of such Investment and net of taxes) and (y) the initial amount of such Investment, PLUS
(E) so long as the Designation thereof was treated as a Restricted Payment that was made after the Issuance Date, with respect to any Unrestricted Subsidiary that has been redesignated as a Restricted Subsidiary after the Issuance Date in accordance with Section 1019, the Fair Market Value of the Company's interest in such Subsidiary at the time of such redesignation; PROVIDED that such amount shall not in any case exceed the Designation Amount with respect to such Restricted Subsidiary upon its Designation, MINUS the Designation Amount (measured as of the date of Designation) with respect to any Restricted Subsidiary which has been designated as an Unrestricted Subsidiary after the date of the Restricted Payment of the asset(sIndenture in accordance with Section 1013, PLUS
(F) or securities proposed to be transferred or issued by $1 million.
(b) Notwithstanding paragraph (a) above, the Company or such and its Restricted Subsidiary, Subsidiaries may take the following actions so long as the case may be, pursuant (with respect to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment clauses (excluding any Restricted Payment described in the preceding clause (2ii), (3iii), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.,
Appears in 1 contract
Limitation on Restricted Payments. The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account or in respect of the Company’s or any shares of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which Capital Stock of the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (Capital Stock, other than (i) dividends or distributions payable in Equity Interests (other than Disqualified Stock) Qualified Capital Stock of the Company or Company, (ii) dividends and distributions payable to the Company or another Restricted Subsidiary of the Company and (iii) pro rata dividends or distributions payable by a Restricted Subsidiary of the Company)Company that is not a Wholly-Owned Subsidiary of the Company to minority holders of Capital Stock of such Restricted Subsidiary;
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct or indirect parent other than in exchange for Qualified Capital Stock of the Company;
(3) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay or otherwise acquire or retire for value value, prior to any scheduled final maturity, scheduled repayment or scheduled - 39 - sinking fund payment, any Indebtedness of the Company or any Guarantor that is subordinated subordinate or junior in right of payment to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionGuarantee; or
(4) make any Restricted Investment (all such payments and other than Permitted Investments); (each of the foregoing actions set forth in these clauses (1), (2), (3) through and (4) above being collectively referred to as “Restricted Payments”a "RESTRICTED PAYMENT"), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, ; if at the time of such Restricted Payment and or immediately after giving pro forma effect thereto as if such Restricted Payment had been made at thereto,
(i) a Default or an Event of Default shall have occurred and be continuing; or
(ii) the beginning of the applicable four-quarter period, have been permitted Company is not able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth (other than Permitted Indebtedness) in the first paragraph of Section 4.09compliance with SECTION 4.12; andor
(3iii) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (including such proposed Restricted Payment) made subsequent to the Issue Date (the amount expended for such purposes, if other than in cash) will be , being the fair market value on the date Fair Market Value of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, property as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, determined in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, good faith by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than Company at the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one time of the categories of Restricted Payments described in making thereof) shall exceed the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.sum of:
Appears in 1 contract
Limitation on Restricted Payments. The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, make any Restricted Payment; provided, however, that:
(1a) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity So long as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments Solvent and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence result thereof, the Company may make the following Restricted Payments: (a) any dividend or other distribution, direct or indirect, on account of any Capital Stock of such Restricted PaymentPerson now or hereafter outstanding which is payable solely in shares of Common Stock; (b) any regularly scheduled payments of principal of and/or interest on any Subordinated Indebtedness made in accordance with the terms and provisions of the Subordinated Agreements; (c) any sales or transfers of Automobile Contracts (or pools thereof) between or among the Company and its Subsidiaries in connection with any Securitization Transaction (including any Warehouse Financing Transaction); (d) any purchases by the Company of its Capital Stock under the Company’s Employee Savings (401(k)) Plan; or (e) the cancellation or acquisition of any Capital Stock of the Company as payment to the Company of the exercise price of any Equity Rights;
(2b) The following shall not constitute a Restricted Payment: (a) any dividend or other distribution, direct or indirect, on account of any Capital Stock (now or hereafter outstanding) of any Subsidiary to the Company; or (b) any dividend or other distribution, direct or indirect, on account of any Capital Stock (now or hereafter outstanding) of any Subsidiary that is not a Subsidiary Guarantor to any other Subsidiary that is a Subsidiary Guarantor;
(c) The Company would, at may make redemptions or purchases of Common Stock held by the time public and/or of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning principal of the applicable four-quarter periodRISRS or the PENS as permitted under, have been permitted to incur at least $1.00 of additional Indebtedness pursuant and subject to the Fixed Charge Coverage Ratio test set forth in terms of, that certain consent letter dated November 15, 2002, between the first paragraph of Section 4.09Purchaser and the Company; and
(3d) such The Company may pay all outstanding principal of, and accrued and unpaid interest on, the PENS on April 15, 2004, the maturity date of the PENS. In addition, the Company advised the Purchaser that on or about November 30, 2003, the Company made a Restricted Payment, together with Payment to FSA when it purchased the FSA Warrant from FSA for an aggregate amount purchase price in cash of all other Restricted Payments approximately $896,500. The Purchaser consents to the payment made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) in consideration for the purchase of the next succeeding paragraph)FSA Warrant, is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary consent being effective as of the date of such redesignation or payment. (ii) such fair market value as The consent provided for in this paragraph is limited to the specific instance in which it is given and does not give rise to any obligation on the part of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of Purchaser to grant any dividend future consents, waivers or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stockamendments.), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.
Appears in 1 contract
Sources: Securities Purchase Agreement (Levine Leichtman Capital Partners Ii Lp)
Limitation on Restricted Payments. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:, take any of the following actions (each, a “Restricted Payment”):
(1I) declare or pay any dividend or return of capital or make any other payment or distribution on account or in respect of the Company’s or any shares of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which Capital Stock of the Company or any of its Restricted Subsidiaries is a party) or Subsidiary to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Capital Stock, other than:
(other than A) dividends or distributions payable in Equity Interests (other than Disqualified Stock) Qualified Capital Stock of the Company,
(B) dividends or distributions payable to the Company and/or a Restricted Subsidiary, or
(C) dividends, distributions or returns of capital made on a pro rata basis to the Company and its Restricted Subsidiaries, on the one hand, and minority holders of Capital Stock of a Restricted Subsidiary, on the other hand (or on less than a pro rata basis to any minority holder or on greater than a pro rata basis to any minority holder to cure (and solely to the extent of) any shortfall distribution amount in pro rata distributions payable to such minority holder arising as a result of priority distributions payable to the Company or a Restricted Subsidiary of from the Companyprior years pursuant to such Restricted Subsidiary’s limited liability company or similar agreement);
(2II) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct or indirect parent of the CompanyManagement Appreciation Interests;
(3III) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled final maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchaseas the case may be, redemption, defeasance or any Subordinated Indebtedness (other acquisition of any such than Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date Company or any Restricted Subsidiary of such payment, purchase, redemption, defeasance or other acquisitionthe Company to the extent permitted under clause (6) of Section 3.8(b)); or
(4IV) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”than Permitted Investments), unless, ; if at the time of and the Restricted Payment immediately after giving effect to such Restricted Paymentthereto:
(1) no a Default or an Event of Default has shall have occurred and is continuing or would occur as a consequence of such Restricted Paymentbe continuing;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted is not able to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.093.8(a); andor
(3) such Restricted Payment, together with the aggregate amount (the amount expended for these purposes, if other than in cash, being the Fair Market Value of the relevant property) of the proposed Restricted Payment and all other Restricted Payments made by subsequent to the Company and its Restricted Subsidiaries after May 11Issue Date up to the date thereof, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) less any Investment Return calculated as of the next succeeding paragraph)date thereof, is less than shall exceed the sum, without duplication, sum of:
(aA) 50% of the excess (or deficit) of:
(i) the cumulative Consolidated Net Income EBITDA of the Company for over (or under),
(ii) 1.4 times the period (taken cumulative Consolidated Net Interest Expense of the Company, accrued during the period, treated as one accounting period) from April , beginning on January 1, 2004 2016 to the end of the Company’s most recently ended recent fiscal quarter for which internal consolidated financial statements are available at information of the time of such Restricted Payment (or, if such Consolidated Net Income for such period Company is a deficit, less 100% of such deficit), available; plus
(bB) $90.0 million; plus
(C) 100% of the aggregate net cash proceeds received by the Company from any Person from any:
(including the fair market value of any Additional Assets i) contribution to the extent acquired in consideration of Equity Interests equity capital of the Company (other than not representing an interest in Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital Capital Stock or from the issue or issuance and sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Qualified Capital Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) in each case, subsequent to the extent that any Restricted Investment that was made after May 11Issue Date, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and or
(ii) the initial amount of such Restricted Investment, plus
(d) issuance and sale subsequent to the extent that any Unrestricted Subsidiary Issue Date (and, in the case of the Company is redesignated as Indebtedness of a Restricted Subsidiary after May 11Subsidiary, 2004, the lesser of (iat such time as it was a Restricted Subsidiary) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests borrowed money of the Company or any Restricted Subsidiary of the Company held by any current that has been converted into or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid exchanged for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Qualified Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07excluding, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9)each case, or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.net cash proceeds:
Appears in 1 contract
Sources: Indenture (MDC Partners Inc)
Limitation on Restricted Payments. The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
, (1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary Qualified Capital Stock of the Company);
) on or in respect of shares of the Company’s Capital Stock to holders of such Capital Stock; (2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct warrants, rights or indirect parent options to purchase or acquire shares of any class of such Capital Stock of the Company;
; (3) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled final maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date Company that is subordinate or junior in right of such payment, purchase, redemption, defeasance payment to the Securities or any Guarantee (other acquisitionthan Indebtedness described in clause (7) of the definition of “Permitted Indebtedness”); or
or (4) make any Restricted Investment (all such payments and other than Permitted Investments) (each of the foregoing actions set forth in these clauses (1), (2), (3) through and (4) above being collectively referred to as a “Restricted PaymentsPayment”), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, if at the time of such Restricted Payment and or immediately after giving pro forma effect thereto as if such Restricted Payment had been made at thereto:
(a) a Default or an Event of Default shall have occurred and be continuing; or
(b) the beginning of the applicable four-quarter period, have been permitted Company is not able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth (other than Permitted Indebtedness) in the first paragraph of compliance with Section 4.094.4; andor
(3c) such Restricted Payment, together with the aggregate amount of all other Restricted Payments (including such proposed Restricted Payment) made subsequent to the Issue Date (the amount expended for such purposes, if other than in cash, being the fair market value of such property as determined reasonably and in good faith by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) Board of Directors of the next succeeding paragraph), is less than Company whose determination shall be conclusive) shall exceed the sum, without duplication, sum of:
(ai) 50% of the cumulative Consolidated Net Income (or if cumulative Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company for the period (taken treating such period as one a single accounting period) from April 1, 2004 commencing on the first day of the first full fiscal quarter commencing after the Issue Date to and including the last day of the fiscal quarter ended immediately prior to the end date of the Company’s most recently ended fiscal quarter such calculation for which internal consolidated financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), available; plus
(bii) 100% of the aggregate Net Cash Proceeds received by the Company from any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to the Issue Date of Qualified Capital Stock of the Company; plus
(iii) without duplication of any amounts included in clause (c)(ii) above, 100% of the aggregate Net Cash Proceeds of any equity contribution received by the Company from a holder of the Company’s Capital Stock; plus
(iv) the amount by which Indebtedness of the Company or any of its Restricted Subsidiaries is reduced on the Company’s balance sheet upon the conversion or exchange subsequent to the Issue Date of any Indebtedness of the Company or any of its Restricted Subsidiaries incurred after the Issue Date into or for Qualified Capital Stock; plus
(v) without duplication, the sum of:
(a) the aggregate amount returned in cash on or with respect to Investments (other than Permitted Investments) made subsequent to the Issue Date whether through interest payments, principal payments, dividends or other distributions or payments;
(b) the net cash proceeds received by the Company (including the fair market value of or any Additional Assets to the extent acquired in consideration of Equity Interests Restricted Subsidiary of the Company from the disposition of all or any portion of such Investments (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus; and
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser upon redesignation of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any an Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11Subsidiary, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary (valued in each case as provided in the definition of “Investment”); provided, however, that the date sum of clauses (a), (b) and (c) above shall not exceed the aggregate amount of all such redesignation Investments made by the Company or (ii) such fair market value as of any Restricted Subsidiary in the date on which such relevant Person or Unrestricted Subsidiary was originally designated as an Unrestricted Subsidiarysubsequent to the Issue Date. The Notwithstanding the foregoing, the provisions set forth in the immediately preceding provisions will paragraph do not prohibit:
(1) the payment of any dividend or other distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, other distribution if the dividend, dividend or other distribution or redemption payment would have been permitted on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenturedeclaration;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing continuing, the payment of regular quarterly dividends at the rate of $1.00 per share upon the Issuer’s 112,000 outstanding shares of Series B Preferred Stock;
(3) the acquisition of any shares of Capital Stock of the Company, either (a) solely in exchange for shares of Qualified Capital Stock of the Company, or would be caused thereby. The amount (b) through the application of all Restricted Payments net proceeds of a substantially concurrent sale for cash (other than cash) will be the fair market value on the date to a Subsidiary of the Restricted Payment Company) of shares of Qualified Capital Stock of the asset(sCompany;
(4) the acquisition of any Indebtedness of the Company that is subordinate or securities proposed junior in right of payment to the Securities or a Guarantee either (a) solely in exchange for shares of Qualified Capital Stock of the Company, or (b) through the application of the net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of (i) shares of Qualified Capital Stock of the Company, or (ii) Refinancing Indebtedness;
(5) if no Default or Event of Default shall have occurred and be transferred or issued continuing, repurchases by the Issuer of Common Stock of the Company from officers, directors and employees of the Company or any of its Subsidiaries or their authorized representatives upon the death, disability or termination of employment of such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value employees or termination of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by their seat on the Board of Directors of the Company, whose determination in an aggregate amount not to exceed $1.0 million in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum of $2.0 million in any calendar year;
(6) if no Default or Event of Default shall have occurred and be continuing, other Restricted Payments in an aggregate amount not to exceed $5.0 million; and
(7) repurchases of Capital Stock of the Company deemed to occur upon the exercise of stock options, warrants or other convertible securities, to the extent such Capital Stock represents a portion of the consideration for such exercise. In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date in accordance with clause (c) of the immediately preceding paragraph, amounts expended pursuant to clauses (1), (2), (3)(b), (4)(b)(i), (5) and (6) shall be evidenced by a Board Resolutionincluded in such calculation. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2)Payment, (3), (4), (6), (7) or (8)) the Company will shall deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted complies with this Indenture and setting forth in reasonable detail the basis upon which the required calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in which calculations may be based upon the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Company’s latest available internal quarterly financial statements.
Appears in 1 contract
Sources: Indenture (Clean Harbors Inc)
Limitation on Restricted Payments. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:, take any of the following actions (each, a "Restricted Payment"):
(1) declare or pay any dividend or return of capital or make any other payment or distribution on account or in respect of the Company’s or any shares of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which Capital Stock of the Company or any of its Restricted Subsidiaries is a party) or Subsidiary to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Capital Stock, other than:
(other than i) dividends or distributions payable in Equity Interests (other than Disqualified Stock) Qualified Capital Stock of the Company Company,
(ii) dividends or distributions payable to the Company and/or a Restricted Subsidiary, or
(iii) pro rata dividends or distributions to the Company and/or a Restricted Subsidiary and minority holders of the Company)Capital Stock of a Restricted Subsidiary;
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any Restricted Subsidiary, or any direct or indirect parent of the Company, other than Capital Stock held by the Company or another Restricted Subsidiary;
(3) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled final maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchaseas the case may be, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionSubordinated Indebtedness; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”than Permitted Investments), unless, ; if at the time of and the Restricted Payment immediately after giving effect to such Restricted Paymentthereto:
(1A) no a Default or an Event of Default has shall have occurred and is continuing or would occur as a consequence of such Restricted Paymentbe continuing;
(2B) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted is not able to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.093.9(a); andor
(3C) such Restricted Payment, together with the aggregate amount (the amount expended for these purposes, if other than in cash, being the Fair Market Value of all other the relevant property) of the proposed Restricted Payment and Restricted Payments, including Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3pursuant to Section 3.10(b)(1), (4), (6), (7) and (8) 5), made subsequent to the Issue Date up to the date thereof, less any Investment Return calculated as of the next succeeding paragraph)date thereof, is less than shall exceed the sum, without duplication, sum of:
(ai) 50% of the cumulative Consolidated Net Income or, if cumulative Consolidated Net Income is a loss, minus 100% of the Company for loss, accrued during the period (taken period, treated as one accounting period) from April 1, 2004 beginning on the first full fiscal quarter after the Issue Date to the end of the Company’s most recently ended recent fiscal quarter for which internal consolidated financial statements are available at information of the time of such Restricted Payment (or, if such Consolidated Net Income for such period Company is a deficit, less 100% of such deficit), available; plus
(bii) 100% of the aggregate net cash proceeds received by the Company from any Person from any:
(including the fair market value of any Additional Assets a) contribution to the extent acquired in consideration of Equity Interests equity capital of the Company (other than not representing an interest in Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Capital Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% issuance and sale of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Qualified Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2)each case, (3), (4), (6), (7) or (8)) the Company will deliver subsequent to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07Issue Date, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.or
Appears in 1 contract
Limitation on Restricted Payments. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:, take any of the following actions (each, a “Restricted Payment”):
(1) declare or pay any dividend or return of capital or make any other payment or distribution on account or in respect of the Company’s or any shares of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which Capital Stock of the Company or any of its Restricted Subsidiaries is a party) or Subsidiary to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Capital Stock, other than:
(other than i) dividends or distributions payable in Equity Interests (other than Disqualified Stock) Qualified Capital Stock of the Company Company, or
(ii) dividends or distributions payable to the Company or and/or a Restricted Subsidiary of the Company)Subsidiary;
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any Restricted Subsidiary, or any direct or indirect parent of the Company, other than Capital Stock held by the Company or another Restricted Subsidiary;
(3) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled final maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchaseas the case may be, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionSubordinated Indebtedness; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”than Permitted Investments), unless, ; if at the time of the Restricted Payment and immediately after giving effect to such Restricted Paymentthereto:
(1A) no a Default or an Event of Default has shall have occurred and is continuing or would occur as a consequence of such Restricted Paymentbe continuing;
(2B) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted is not able to incur Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.093.9(a); andor
(3C) such the aggregate amount (the amount expended for these purposes, if other than in cash, being the Fair Market Value of the relevant property) of Restricted Payments, including the proposed Restricted Payment, together with made subsequent to the aggregate amount of all other Restricted Payments made by Issue Date up to the Company and its Restricted Subsidiaries after May 11date thereof, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) less any Investment Return calculated as of the next succeeding paragraph)date thereof, is less than shall exceed the sum, without duplication, sum of:
(ai) fifty percent (50% %) of the cumulative Consolidated Net Income or, if cumulative Consolidated Net Income is a loss, minus one hundred percent (100%) of the Company for loss, accrued during the period (taken period, treated as one accounting period) from April 1, 2004 beginning on the first full fiscal quarter after the Issue Date to the end of the Company’s most recently ended recent fiscal quarter for which internal consolidated financial statements are available at information of the time of such Restricted Payment (or, if such Consolidated Net Income for such period Company is a deficit, less 100% of such deficit), available; plus
(bii) one hundred percent (100% %) of the aggregate net cash proceeds Net Cash Proceeds received by the Company (including the fair market value of from any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or Person from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.
Appears in 1 contract
Sources: Indenture (Coleman Cable, Inc.)
Limitation on Restricted Payments. The Company will shall not, and, in the case of clauses (2), (3) and will (4) below, shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ 's Equity Interests (Interests, including, without limitation, any payment in connection with any merger or consolidation to which involving the Company or any of its Restricted Subsidiaries is a party) Company, or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (such, other than dividends or distributions payable in its Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (value, including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of involving the Company, any of its Equity Interests;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturityTerm Loans, except a payment, purchase, redemption, defeasance payment of interest or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or at the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “"Restricted Payments”"), unless, at the time of and after giving effect to such Restricted Payment:
(1a) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Paymentthereof;
(2b) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter periodPayment, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Interest Coverage Ratio test set forth in the first paragraph of Section 4.095.8; and
(3c) such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made by since July 15, 2003 (the Company and its Restricted Subsidiaries after May 11"Start Date"), 2004 (excluding Restricted Payments permitted by other than those described in clauses (2), (3), (4), (6), (75) and (8) 6) of the next succeeding paragraph)penultimate paragraph of this Section 5.9, is less than shall not exceed, at the date of determination, the sum, without duplication, of:
(ai) an amount equal to 50% of the Company's Consolidated Net Income (or, if Consolidated Net Income is a loss, minus 100% of the Company for amount of such loss) accrued during the period (taken treated as one accounting period) from April 1, 2004 beginning on the day after the Start Date to the end of the Company’s most recently ended recent full fiscal quarter for which internal financial statements are available at preceding the time date of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), which its consolidated financial statements are available; plus
(bii) an amount equal to 100% of the aggregate net cash proceeds Net Cash Proceeds received by the Company (including after the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 Start Date as a contribution to its common equity capital contributions or from the issue or sale of its Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of its convertible or exchangeable Disqualified Stock or its convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Restricted Subsidiary of the Company), ; plus,
(ciii) the aggregate amount returned in cash after the Start Date on or with respect to Restricted Investments whether through interest payments, dividends or other distributions or payments; plus,
(iv) to the extent that any Restricted Investment that was made after May 11, 2004 the Start Date is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) to the initial amount Company or any of such its Restricted Investment, Subsidiaries; plus,
(dv) to the extent that the Company's Board of Directors designates any Unrestricted Subsidiary of that was designated as such after the Company is redesignated Start Date as a Restricted Subsidiary after May 11, 2004Subsidiary, the lesser of (i) the aggregate fair market value of all Restricted Investments owned by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary. Notwithstanding the foregoing restrictions, and except as set forth in the following paragraphs, prior to the Start Date, the Company will be permitted to declare and pay dividends to the Company’s Investment 's stockholder, The Mission Group, as follows:
(1) in amounts sufficient to permit Edison International to make required interest payments on its outstanding 6 7/8% Notes due 2004;
(2) with respect to The Mission Group and Edison International's corporate overhead, in amounts that are consistent with amounts historically expended for such Subsidiary as of overhead; and
(3) for other Edison International working capital and general corporate purposes in an amount not to exceed $50.0 million in aggregate. In the event the Company completes a Public Equity Offering prior to the Start Date, the provisions described in the immediately preceding paragraph shall not apply, and the Start Date shall be deemed to be the date of such redesignation the Indenture. In addition, so long as no Default has occurred and is continuing or (ii) such fair market value as of would be caused thereby, the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may bethereof, if the dividend, distribution or redemption payment on the at said date of declaration or the date of the notice of redemption, as the case may be, such payment would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any of the Company's subordinated Indebtedness of the Company or any Guarantor or of any its Equity Interests of the Company in exchange for, or out of the net cash proceeds Net Cash Proceeds of the substantially concurrent sale (other than to a Subsidiary one of the Companyits Restricted Subsidiaries) of, its Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds Net Cash Proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(bc)(ii) of the preceding paragraphfirst paragraph of Section 5.9;
(3) the defeasance, redemption, repurchase, retirement repurchase or other acquisition of the Company's subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, of Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any of the Company's Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant member of the Company its (or any of its Restricted Subsidiaries Subsidiaries') management pursuant to any management equity subscription agreement or planagreement, stock option agreement or similar agreement or planagreements; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may shall not exceed $1.0 million in any twelve-month period (with unused amounts being carried over to succeeding twelve month periods, subject to a maximum of $2.0 million in any twelve-month period);
(5) payments made pursuant to the Tax Sharing Agreements; provided such payments may be made whether or not a Default then exists;
(6) the acquisition of Equity Interests payment by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness to The Mission Group of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% net cash proceeds from the sale of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock Term Loans; provided that in connection with any transaction such payment all such net cash proceeds so paid are promptly, but in any event prior to 6:00 p.m., Pacific Standard Time, on the date of such payment, loaned or otherwise permitted under this Section 4.07distributed by The Mission Group to Edison International and promptly, but in any event prior to 6:00 p.m., Pacific Standard Time, on the date of such payment, applied by Edison International to repay a portion of its indebtedness that matures in 2001; orand
(97) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 10.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will shall be the fair market value value, on the date of the Restricted Payment Payment, of the asset(s) assets or securities proposed to be transferred or issued to or by the Company or such its Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant Section 5.9 will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, determined by the Company's Board of Directors of the Company, whose determination resolution with respect thereto shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver delivered to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Administrative Agent.
Appears in 1 contract
Limitation on Restricted Payments. The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, make any Restricted Payment, unless:
(1a) declare no Default or pay any dividend or make any other payment or distribution on account Event of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments Default shall have occurred and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unlessbe continuing, at the time of and or immediately after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2b) the Company would, at the time of such Restricted Payment and immediately after giving pro forma effect thereto as if to such Restricted Payment had been made at Payment, the beginning of the applicable four-quarter period, have been permitted to Company could incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.094.8; and
(3c) immediately after giving effect to such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made by after the Company and its Restricted Subsidiaries after May 11, 2004 Issue Date does not exceed the sum of (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (71) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50100% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of Company's Cumulative EBITDA minus 1.6 times the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment 's Cumulative Consolidated Interest Expense, plus (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b2) 100% of the aggregate net cash proceeds received by the Company (including Net Proceeds and the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of securities or other property received by the Company from the issue or sale, after the Issue Date, of Capital Stock (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital Capital Stock or from the issue or sale of Equity Interests Capital Stock of the Company issued to any Subsidiary of the Company) of the Company or any Indebtedness or other securities of the Company convertible into or exercisable or exchangeable for Capital Stock (other than Disqualified Capital Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have which has been so converted into or exchanged for such Equity Interests exercised or exchanged, as the case may be, plus (other than Equity Interests (or Disqualified Stock or debt securities3) sold to a Subsidiary $1.0 million. The provisions of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of this Section 4.9 shall not prohibit: (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may bethereof, if the dividend, distribution or redemption payment on the at such date of declaration or the date of the notice of redemption, as the case may be, such payment would have complied comply with the provisions of the this Indenture;
; (2ii) the redemption, repurchase, retirement, defeasance acquisition and cancellation or other acquisition retirement of any subordinated Indebtedness shares of Capital Stock of the Company or any Guarantor Subordinated Indebtedness by conversion into, or of any Equity Interests of the Company by or in exchange for, shares of Capital Stock (other than Disqualified Capital Stock), or out of of, the net cash proceeds Net Proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of shares of Capital Stock of the Company (other than Disqualified Capital Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3iii) the defeasance, redemption, repurchase, redemption or retirement or other acquisition of subordinated Subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
by conversion into, or out of the Net Proceeds of, a substantially concurrent sale or incurrence of Indebtedness (4) the payment of other than any dividend or distribution by Indebtedness owed to a Restricted Subsidiary of the Company) of the Company that is contractually subordinated in right of payment to the holders of its Equity Interests on a pro rata basis;
Notes to at least the same extent as the Subordinated Indebtedness being redeemed or retired; (5iv) the repurchaseretirement of any shares of Disqualified Capital Stock by conversion into, or by exchange for, shares of Disqualified Capital Stock, or out of the Net Proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of other shares of Disqualified Capital Stock; (v) the purchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection of the Company (other than Disqualified Capital Stock) or options on such shares held by the Company's or its Subsidiaries' officers or employees or former officers or employees (or their estates or beneficiaries under their estates) upon the death, disability, retirement or termination of employment of such current or former officers or employees pursuant to the terms of an employee benefit plan or any other agreement pursuant to which such shares of Capital Stock or options were issued or pursuant to a severance, buy-sell or right of first refusal agreement with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 millionsuch current or former officer or employee; provided, howeverthat the aggregate cash consideration paid, that at the time ofor distributions made, and after giving effect to, any Restricted Payment permitted under the preceding pursuant to this clause (9), v) shall not in any one fiscal year exceed $1.0 million; and (vi) so long as no Default or Event of Default shall have occurred and be continuing at the time of or would be caused thereby. The immediately after giving effect to such payment, the payment of management and advisory fees to ▇▇▇▇ ▇▇▇▇ Equity Partners, L.P. and its Affiliates and successors and assigns that, when taken together with all previous amounts paid in respect thereof since April 15, 1994, does not exceed an average annual amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution675,000 per year. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2)Payment, (3), (4), (6), (7) or (8)) the Company will shall deliver to the Trustee an Officers’ ' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 4.9 were computed. For purposes , which calculations may be based upon the Company's latest available financial statements, and that no Default or Event of determining compliance with this Section 4.07, in the event that a Default exists and is continuing and no Default or Event of Default will occur immediately after giving effect to any Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Payments.
Appears in 1 contract
Limitation on Restricted Payments. (a) The Company will not, and will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”)Payment, unless, unless at the time of and after giving pro forma effect to such the proposed Restricted Payment:
, (1a) no Default or Event of Default has shall have occurred and is be continuing (or would occur as a consequence of such Restricted Payment;
result therefrom), (2b) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of under Section 4.09; and
4.4 and (3c) such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made on or after the Issue Date by the Company and its Restricted Subsidiaries after May 11, 2004 or any Subsidiary shall not exceed the sum of (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(ai) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, or if such Consolidated Net Income for such period is shall be a deficit, less minus 100% of such deficit)) of the aggregate Consolidated Net Income accrued during the period beginning on the first day of the fiscal quarter in which the Issue Date falls and ending on the last day of the fiscal quarter ending immediately prior to the date of such proposed Restricted Payment, plus
plus (bii) an amount equal to the aggregate Qualified Proceeds received by the Company, subsequent to the Issue Date, from contributions to the Company's capital or the issuance or sale (other than to a Subsidiary) of shares of its Capital Stock (excluding Redeemable Stock, but including Capital Stock issued upon the exercise of options, warrants or rights to purchase Capital Stock (other than Redeemable Stock) of the Company) and the liability (expressed as a positive number) as expressed on the face of a balance sheet in accordance with GAAP in respect of any Indebtedness of the Company or any of its Subsidiaries, or the carrying value of Redeemable Stock, which has been converted into, exchanged for or satisfied by the issuance of shares of Capital Stock (other than Redeemable Stock) of the Company, subsequent to the Issue Date, plus (iii) 100% of the aggregate net cash proceeds received reduction in Restricted Investments, subsequent to the Issue Date, in any Person, resulting from payments of interest on Indebtedness, dividends, repayments of loans or advances, or other transfers of Property (but only to the extent such interest, dividends, repayments or other transfers of Property are not included in the calculation of Consolidated Net Income), in each case to the Company or any Subsidiary from any Person (including, without limitation, from Unrestricted Subsidiaries) or from redesignations of Unrestricted Subsidiaries as Subsidiaries (valued in each case as provided in the definition of "Investments"), not to exceed in the case of any Person the amount of Restricted Investments previously made by the Company (including the fair market value of or any Additional Assets to the extent acquired Subsidiary in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that Person and in each such case which was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated treated as a Restricted Subsidiary after May 11, 2004, the lesser of Payment.
(ib) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding foregoing provisions will not prohibit:
prevent (1A) the payment of any dividend or distribution or the consummation on Capital Stock of any irrevocable redemption of debt that is subordinate to the Notes, class within 60 days after the date of its declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on at the date of declaration or such payment would be permitted by the date Indenture; (B) any Restricted Payment made in exchange for Capital Stock of the notice of redemptionCompany (other than Redeemable Stock), as the case may be, would have complied with the provisions or out of the Indenture;
Qualified Proceeds from the substantially concurrent issuance or sale (2other than to a Subsidiary) of Capital Stock of the redemptionCompany (other than Redeemable Stock), provided that the Qualified Proceeds from such sale are excluded from computations under clause (c) (ii) above to the extent that such proceeds are applied to purchase or redeem such Capital Stock or Subordinated Indebtedness; (C) so long as no Default shall have occurred and be continuing or should occur as a consequence thereof, any repurchase, retirementredemption payment, defeasance defeasance, acquisition or other acquisition retirement for value of any subordinated Subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company a Subsidiary solely in exchange for, or out of the net cash proceeds of Qualified Proceeds from the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated new Subordinated Indebtedness of the Company or a Subsidiary, so long as such Subordinated Indebtedness is permitted under Section 4.4 and (x) is subordinated to the Securities at least to the same extent as the Subordinated Indebtedness so exchanged, purchased or redeemed, (y) has a stated maturity later than the stated maturity of the Subordinated Indebtedness so exchanged, purchased or redeemed and (z) has an Average Life at the time incurred that is greater than the remaining Average Life of the Subordinated Indebtedness so exchanged, purchased or redeemed; (D) payments to Holdings to fund payments made or to be made by Holdings for the benefit of the Company or any Guarantor with Subsidiary of the net cash proceeds from an incurrence ofCompany, or in exchange forincluding, Permitted Refinancing Indebtedness;
(4) without limitation, the payment of any dividend or distribution by a Restricted Subsidiary of the Company management and other professional fees, whether pursuant to the holders Shareholders Agreement or otherwise, and the payment of its Equity Interests on a pro rata basis;
taxes; (5E) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of Holdings, the Company or any Restricted Subsidiary of the Company held by any current future, present or former directoremployee, officer, employee consultant or consultant director of the Company (or any of its Restricted Subsidiaries Subsidiaries) pursuant to any management equity subscription agreement or plan, stock option plan or agreement or similar any other management or employee benefit plan or agreement or planin effect as of the Issue Date; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may shall not exceed (x) $2.0 1.5 million in any twelve-month period;
calendar year (6with unused amounts in any calendar year being carried over for two succeeding calendar years subject to a maximum (without giving effect to clause (y) below) of $3.0 million in any calendar year) plus (y) the acquisition aggregate cash proceeds received by the Company during such calendar year from any issuance of Equity Interests by the Company in connection with to members of management of the Company and its Subsidiaries; (F) repurchases of Equity Interests deemed to occur upon exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness if such Equity Interests represent a portion of the Company or any Restricted Subsidiary exercise price of such options; (aG) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control payments in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect pursuant to the Notes and has completed terms of any Permitted Refinancing Indebtedness or any Permitted Subsidiary Refinancing Indebtedness; (H) payments to redeem, or to avoid the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of issuance of, fractional shares of Capital Stock in connection of the Company; (I) the payment of dividends by a Subsidiary on any class of common stock of such Subsidiary if such dividend is paid pro rata to all holders of such class of common stock, (J) the repurchase of any class of common stock of a Subsidiary if such repurchase is made pro rata with any transaction otherwise permitted under this Section 4.07; or
respect to such class of common stock and (9K) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 3.0 million; provided. Restricted Payments permitted to be made as described in the first sentence of this paragraph will be excluded in calculating the amount of Restricted Payments thereafter.
(c) The Board of Directors may designate any Subsidiary to be an Unrestricted Subsidiary if such designation is permitted by this Section 4.6 and otherwise would not cause a Default. For purposes of making such determination, however, that all outstanding Investments by the Company and its Subsidiaries (except to the extent repaid in cash) in the Subsidiary so designated will be deemed to be Restricted Payments at the time of, of such designation and after giving effect to, any Restricted Payment permitted under will reduce the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all available for Restricted Payments (other than cash) under Section 4.6(a). All such outstanding Investments will be deemed to constitute Investments in an amount equal to the fair market value on of such Investments at the date time of such designation. Such designation shall only be permitted if such Restricted Payment would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
(d) For purposes of this Section 4.6, if a particular Restricted Payment involves a non-cash payment, including a distribution of assets, then such Restricted Payment shall be deemed to be an amount equal to the cash portion of such Restricted Payment, if any, plus an amount equal to the Fair Market Value of the Restricted Payment non-cash portion of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2)Payment, (3), (4), (6), (7) or (8)) the Company will shall deliver to the Trustee an Officers’ Officer's Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 4.6 were computed. For purposes of determining compliance with this Section 4.07, in which calculations may be based upon the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Company's latest available financial statements.
Appears in 1 contract
Limitation on Restricted Payments. The Company will notnot make, and will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, make, any Restricted Payment, unless:
(1a) declare no Default or pay any dividend or make any other payment or distribution on account Event of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments Default shall have occurred and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, be continuing at the time of and or immediately after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2b) the Company would, at the time of such Restricted Payment and immediately after giving pro forma effect thereto as if to such Restricted Payment had been made at Payment, the beginning of the applicable four-quarter period, have been permitted to Company could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of (other than Permitted Indebtedness) under Section 4.094.10; and
(3c) immediately after giving effect to such Restricted Payment, together with the aggregate of all Restricted Payments declared or made after the Existing Notes Issue Date does not exceed the sum of (without duplication):
(1) 100% of the Company’s Cumulative EBITDA minus 1.4 times the Company’s Cumulative Consolidated Interest Expense; plus
(2) 100% of the aggregate Net Proceeds and the fair market value of securities or other property received by the Company, after January 1, 2001, from (a) the issue or sale of Capital Stock (other than Disqualified Capital Stock or Capital Stock of the Company issued to any Subsidiary of the Company) of the Company or any Indebtedness or other securities of the Company convertible into or exercisable or exchangeable for Capital Stock (other than Disqualified Capital Stock) of the Company which has been so converted or exercised or exchanged, as the case may be, (b) any capital contribution to the Company from Parent (except as contemplated by clause (vi) of the following paragraph), and (c) any loans made to the Company by Parent prior to the Existing Notes Issue Date upon the cancellation of such loans by Parent; plus
(3) the net reductions in Investments (other than reductions in Permitted Investments) in any Person resulting from payments of interest on Indebtedness, dividends, repayments of loans, partial or total releases or discharges of Guaranteed Permitted Unrestricted Subsidiary Obligations, or from designations of Unrestricted Subsidiaries as Restricted Subsidiaries, valued in each case at the fair market value thereof, not to exceed the amount of all other Restricted Payments Investments previously made by the Company and its Restricted Subsidiaries in such Person. For purposes of determining under this clause (c) the amount expended for Restricted Payments, cash distributed shall be valued at the face amount thereof and property other than cash shall be valued at its fair market value as determined by the Board of Directors of the Company reasonably and in good faith. Notwithstanding the foregoing, the Company and any of the Restricted Subsidiaries may pay any dividend or make any distribution to the Parent for the purpose of funding a payment of any dividend or making of any distribution on or in respect of shares of the Parent’s Capital Stock, in the case of each such dividend or distribution by the Company or any of the Restricted Subsidiaries constituting a Restricted Payment, to the extent that the Parent believes in good faith that it qualifies as a “real estate investment trust” under Section 856 of the Code (or any successor provision) and that the declaration or payment of a dividend or making of a distribution in such amount is necessary to maintain the Parent’s status as a REIT for any taxable year, with such dividend to be paid or distribution to be made as and when determined by the Parent, whether during or after May 11the end of the relevant taxable year; provided, 2004 however, that (excluding Restricted Payments permitted by clauses (2i) at the time of, and after giving effect to, any such dividend or distribution, no Event of Default under Section 6.01(1), (3), 2) (4without giving effect to the grace period set forth therein), (6), ) or (7) shall have occurred and (8) be continuing or would occur as a consequence thereof and the obligations in respect of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that Notes shall not otherwise have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) accelerated and (ii) two consecutive dividends or distributions pursuant to this paragraph shall not be permitted during the initial amount pendency of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary single Event of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted SubsidiaryDefault. The preceding provisions will of this Section 4.11 shall not prohibit:
(1i) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may bethereof, if the dividend, distribution or redemption payment on the at such date of declaration or the date of the notice of redemption, as the case may be, such payment would have complied comply with the provisions of this Indenture; provided, however, that in calculating the Indentureaggregate amount of Restricted Payments for purposes of Section 4.11(c), such amounts declared shall be included in the calculation but such amounts expended shall be excluded from the calculation;
(2ii) the redemption, repurchase, retirement, defeasance or other acquisition retirement of any subordinated shares of Capital Stock of the Company or Indebtedness of the Company which is subordinated or any Guarantor pari passu in right of payment to the Notes by conversion into, or of any Equity Interests of the Company by or in exchange for, shares of Capital Stock (other than Disqualified Capital Stock), or out of the net cash proceeds Net Proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of other shares of Capital Stock of the Company (other than Disqualified Capital Stock); provided, with a sale being deemed substantially concurrent if such redemptionhowever, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds Net Proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will retirement shall be excluded from clause (3)(bc)(2) of this Section 4.11, provided further, however, that in calculating the preceding paragraphaggregate amount of Restricted Payments for purposes of Section 4.11(c), amounts expended pursuant to this clause (ii) shall be excluded from the calculation;
(3iii) the defeasance, redemption, repurchase, redemption or retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with which is subordinated in right of payment to the net cash proceeds from an incurrence of, or Notes in exchange for, Permitted Refinancing Indebtednessby conversion into, or out of the Net Proceeds of, a substantially concurrent sale or incurrence of Indebtedness (it being understood that a redemption or retirement or irrevocable deposit for redemption or retirement of Indebtedness within 45 days of such sale or incurrence shall be deemed “substantially concurrent”) of the Company (other than any Indebtedness owed to a Subsidiary of the Company) that is, contractually subordinated in right of payment to the Notes to at least the same extent as the subordinated Indebtedness being redeemed or retired and (x) has a Stated Maturity no earlier than the final maturity date of the Indebtedness being redeemed or retired and (y) has an Average Life to Stated Maturity equal to or greater than the remaining Average Life to Stated Maturity of the Indebtedness being redeemed or retired; provided, however, that the amount of any such Net Proceeds that are utilized for any such redemption or retirement shall be excluded from clause (c)(2) of this Section 4.11, provided further, however, that in calculating the aggregate amount of Restricted Payments for purposes of Section 4.11(c) amounts expended pursuant to this clause (iii) shall be excluded from the calculation;
(4iv) the funding of loans (but not including the forgiveness of any such loan) to executive officers, directors and shareholders for relocation loans, bonus advances and other purposes consistent with past practices or the purchase, redemption or other acquisition for value of shares of Capital Stock of the Parent or the Company (other than Disqualified Capital Stock) or options on such shares held by the Parent’s or the Company’s or the Restricted Subsidiaries’ officers or employees or former officers or employees (or their estates or trusts or beneficiaries under their estates or trusts for the benefit of such beneficiaries) upon the death, disability, retirement or termination of employment of such current or former officers or employees pursuant to the terms of an employee benefit plan or any other agreement pursuant to which such shares of Capital Stock or options were issued or pursuant to a severance, buy-sell or right of first refusal agreement with such current or former officer or employee; provided that the aggregate amount of any such loans funded and cash consideration paid, or distributions made, pursuant to this clause (iv) do not in any one fiscal year exceed $15.0 million; provided further, however, that in calculating the aggregate amount of Restricted Payments for purposes of Section 4.11(c), amounts expended pursuant to this clause (iv) shall be excluded from the calculation;
(v) the making of Investments in Unrestricted Subsidiaries and joint ventures in an aggregate amount not to exceed since the Issue Date the greater of (A) $750.0 million and (B) 8% of the Company’s Total Assets (plus, so long as the condition set forth in Section 4.11(b) is satisfied at such time, an additional $50.0 million); provided, however, that in calculating the aggregate amount of Restricted Payments made subsequent to the Issue Date for purposes of Section 4.11(c), amounts expended pursuant to this clause (v) shall be excluded in the calculation;
(vi) distributions by the Company to Parent to permit Parent to pay obligations actually incurred by Parent in respect of the payment of any dividend or distribution by a Restricted Subsidiary operating expenses of the Company or the Restricted Subsidiaries in an aggregate amount in any fiscal year not to exceed 5% of the holders total operating expenses of its Equity Interests the Company and the Restricted Subsidiaries on a pro rata basisconsolidated basis determined in accordance with GAAP and Tax Payments permitted by Section 4.14(b)(v); provided, however, that in calculating the aggregate amount of Restricted Payments for purposes of Section 4.11(c), amounts expended pursuant to this clause (vi) shall be excluded from the calculation;
(5vii) other Restricted Payments in an aggregate amount not to exceed $75.0 million in the aggregate; provided, however, that in calculating the aggregate amount of Restricted Payments made subsequent to the Issue Date for purposes of Section 4.11(c), amounts expended pursuant to this clause (vii) shall be excluded in the calculation; and
(viii) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests Indebtedness that is contractually subordinated in right of payment to the Company Notes and the Guarantees in accordance with Sections 4.13 and 4.19; provided, however, that all Notes tendered in connection with a Change of Control Offer or Excess Proceeds Offer, as applicable, have been repurchased, redeemed or acquired for value prior to any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries Payment being made pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or planthis clause (viii); provided further, however, that in calculating the aggregate price paid amount of Restricted Payments for all such repurchasedpurposes of Section 4.11(c), redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month periodamounts expended pursuant to this clause (viii) shall be excluded from the calculation;
(6ix) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchasedefeasance, redemption, repurchase, redemption, defeasance retirement or other acquisition or retirement for value of Indebtedness that is contractually subordinated Indebtedness in right of payment to the Company or any Restricted Subsidiary (a) Notes if, at a purchase price not greater than 101.0% the time of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided thatsuch defeasance, prior to or simultaneously with such purchaseredemption, repurchase, redemption, defeasance retirement or other acquisition or retirementretirement and after giving effect thereto, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect Secured Leverage Ratio would be less than 4.5 to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million1.0; provided, however, that at in calculating the time ofaggregate amount of Restricted Payments made for purposes of Section 4.11(c), and after giving effect to, any Restricted Payment permitted under the preceding amounts expended pursuant to this clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cashix) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by excluded from the calculation; and
(x) any consideration, payment, dividend, distribution or other transfer in connection with a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computedPermitted Securitization Financing. For purposes of determining compliance with this Section 4.074.11, in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1i) through (9), or is entitled to be made pursuant to x) above and/or the first or third paragraph of this Section 4.07, 4.11 and/or one or more of the clauses contained in the definition of “Permitted Investments,” the Company will shall be permitted to divide or classify (or later divided or classify divide or reclassify in whole or in part in its sole discretion(based on circumstances existing on the date of such reclassification) such Restricted Payment (or a portion thereof) between such clauses (i) through (x) and/or such first or third paragraph and/or one or more of the clauses contained in the definition of “Permitted Investments,” in any manner that otherwise complies with this Section 4.074.11.
Appears in 1 contract
Sources: Indenture (Lamar Media Corp/De)
Limitation on Restricted Payments. (a) The Company will notshall not make, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitationSubsidiary to make, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any such proposed Restricted Payment permitted under the preceding clause Payment, (9), no Default or Event of i) a Default shall have occurred and be continuing or would be caused thereby. The continuing, (ii) the aggregate amount of such Restricted Payment and all other Restricted Payments made since November 14, 1995 (the amount of any Restricted Payment, if other than cash, to be based upon Fair Market Value) would exceed an amount equal to the sum of (A) the excess of (I) Cumulative EBITDA over (II) the product of 1.2 and Cumulative Interest Expense, (B) Capital Stock Sale Proceeds, (C) the amount by which Indebtedness of the Company or any Restricted Subsidiary is reduced on the Company's balance sheet upon the conversion or exchange (other than cashby a Subsidiary) will be subsequent to the fair market value on the date Issue Date of any Indebtedness of the Company or any Restricted Payment Subsidiary convertible or exchangeable for Capital Stock (other than Redeemable Stock) of the asset(s) Company (less the amount of any cash or securities proposed to be transferred or issued other Property distributed by the Company or such any Restricted SubsidiarySubsidiary upon conversion or exchange) and (D) $100,000,000, as or (iii) the case may be, Company could not incur at least $1.00 of additional Indebtedness pursuant to Section 3.04(a).
(b) Notwithstanding Section 3.05(a), the Restricted Payment. The fair market value Company may (i) pay dividends on its Capital Stock within 60 days of the declaration thereof if, on the declaration date, such dividends could have been paid in compliance with Section 3.05(a), (ii) redeem, repurchase, defease, acquire or retire for value, any Indebtedness subordinate (whether pursuant to its terms or by operation of law) in right of payment to the Securities with the proceeds of any assets Permitted Refinancing Indebtedness or securities that are required (iii) acquire, redeem or retire Capital Stock or Indebtedness subordinate (whether pursuant to be valued its terms or by this covenant will be determinedoperation of law) in right of payment to the Securities in exchange for, or in the case of amounts under $50.0 millionconnection with a substantially concurrent issuance of, by an officer Capital Stock of the Company and, in (other than Redeemable Stock).
(c) Any payments made pursuant to clauses (ii) and (iii) of Section 3.05(b) shall be excluded from the case of amounts of $50.0 million or more, by the Board of Directors calculation of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories aggregate amount of Restricted Payments described in made after November 14, 1995; provided, however, that the preceding clauses (1) through (9), or is entitled to be made proceeds from the issuance of Capital Stock pursuant to the first paragraph Section 3.05(b)(iii) shall not constitute Capital Stock Sale Proceeds for purposes of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.073.05(a)(ii)(B).
Appears in 1 contract
Limitation on Restricted Payments. The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
, (1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary Qualified Capital Stock of the Company);
) on or in respect of shares of the Company’s Capital Stock to holders of such Capital Stock; (2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct warrants, rights or indirect parent options to purchase or acquire shares of any class of such Capital Stock of the Company;
; (3) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled final maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date Company that is subordinate or junior in right of such payment, purchase, redemption, defeasance payment to the Securities or any Guarantee (other acquisitionthan Indebtedness described in clause (7) of the definition of “Permitted Indebtedness”); or
or (4) make any Restricted Investment (all such payments and other than Permitted Investments) (each of the foregoing actions set forth in these clauses (1), (2), (3) through and (4) above being collectively referred to as a “Restricted PaymentsPayment”), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, if at the time of such Restricted Payment and or immediately after giving pro forma effect thereto as if such Restricted Payment had been made at thereto:
(a) a Default or an Event of Default shall have occurred and be continuing; or
(b) the beginning of the applicable four-quarter period, have been permitted Company is not able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth (other than Permitted Indebtedness) in the first paragraph of compliance with Section 4.094.4; andor
(3c) such Restricted Payment, together with the aggregate amount of all other Restricted Payments (including such proposed Restricted Payment) made after the Issue Date (the amount expended for such purposes, if other than in cash, being the fair market value of such property as determined reasonably and in good faith by the Board of Directors of the Company) shall exceed the sum of:
(i) 50% of the cumulative Consolidated Net Income (or if cumulative Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company earned after the Issue Date and on or prior to the date the Restricted Payment is made (the “Reference Date”) (treating such period as a single accounting period); plus
(ii) 100% of the aggregate Net Cash Proceeds and the fair market value, as determined in good faith by the Board of Directors of the Company, of property other than cash received by the Company from any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to the Issue Date and on or prior to the Reference Date of Qualified Capital Stock of the Company (other than Excluded Contributions); plus
(iii) without duplication of any amounts included in clause (c)(ii) above, 100% of the aggregate Net Cash Proceeds of any equity contribution received by the Company from a holder of the Company’s Capital Stock (other than Excluded Contributions); plus
(iv) the amount by which Indebtedness of the Company or that of any of its Restricted Subsidiaries is reduced on the Company’s balance sheet upon the conversion or exchange after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) the Issue Date of any Indebtedness of the next succeeding paragraph), is less than Company or any Indebtedness of its Restricted Subsidiaries incurred after the sum, Issue Date into or for Qualified Capital Stock; plus
(v) without duplication, the sum of:
(a) 50% of the Consolidated Net Income of aggregate amount returned in cash on or with respect to Investments (other than Permitted Investments) made after the Company for the period (taken as one accounting period) from April 1Issue Date whether through interest payments, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (orprincipal payments, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plusdividends or other distributions or payments;
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of or any Additional Assets to the extent acquired in consideration of Equity Interests Restricted Subsidiary of the Company from the disposition of all or any portion of such Investments (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus; and
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser upon redesignation of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any an Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11Subsidiary, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary (valued in each case as provided in the definition of “Investment”). Notwithstanding the date of such redesignation or (ii) such fair market value as of foregoing, the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The provisions set forth in the immediately preceding provisions will paragraph do not prohibit:
(1) the payment of any dividend or other distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, other distribution if the dividend, dividend or other distribution or redemption payment would have been permitted on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenturedeclaration;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing continuing, the redemption, repurchase, retirement or would be caused thereby. The amount other acquisition of all Restricted Payments any shares of Capital Stock of the Company, either (a) solely in exchange for shares of Qualified Capital Stock of the Company, or (b) through the application of net proceeds of a substantially concurrent sale for cash (other than cash) will be the fair market value on the date to a Subsidiary of the Restricted Payment Company) of shares of Qualified Capital Stock of the asset(sCompany;
(3) if no Default or securities proposed Event of Default shall have occurred and be continuing, the acquisition of any Indebtedness of the Company that is subordinate or junior in right of payment to the Securities or a Guarantee either (a) solely in exchange for shares of Qualified Capital Stock of the Company, or (b) through the application of the net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company or Refinancing Indebtedness;
(4) if no Default or Event of Default shall have occurred and be transferred or issued continuing, repurchases by the Company or such any Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer Subsidiary of the Company andof securities of the Company from employees, in directors or consultants of the case Company or any Subsidiary of amounts the Company or their authorized representatives (a) upon the death, disability or termination of $50.0 million employment of such employees, directors or moreconsultants or to the extent required pursuant to employee benefit plans, by employment agreements or consulting agreements or (b) pursuant to any other agreement with such employees or directors of or consultants to the Board of Directors Company or any Subsidiary of the Company, whose determination in an aggregate amount not to exceed $15.0 million in any calendar year (with unused amounts in any calendar year being carried over to succeeding years subject to a maximum of $30.0 million in any calendar year), provided that the cancellation of Indebtedness owing to the Company or any Restricted Subsidiary of the Company from such employees, directors or consultants of the Company or any of its Restricted Subsidiaries in connection with a repurchase of Capital Stock of the Company will not be deemed to constitute a Restricted Payment under this Indenture;
(5) the declaration and payment of dividends to holders of any class or series of Preferred Stock of the Company, provided that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Preferred Stock, after giving effect to such issuance on a pro forma basis, the Company would have been able to incur at least $1.00 of Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.4;
(6) the payment of dividends on the Company’s Common Stock in an amount not to exceed $60.0 million per annum;
(7) the declaration and payment of dividends to holders of any class or series of Disqualified Capital Stock of the Company or any of its Restricted Subsidiaries issued in accordance with Section 4.4 to the extent such dividends are included in the definition of “Consolidated Fixed Charges”;
(8) other Restricted Payments in an aggregate amount not to exceed $100.0 million;
(9) if no Default or Event of Default shall have occurred and be continuing, payments or distributions to dissenting stockholders pursuant to applicable law, pursuant to or in connection with a consolidation, merger or transfer of assets that complies with the provisions of this Indenture applicable to mergers, consolidations and transfers of all or substantially all of the property and assets of the Company;
(10) Investments that are made with Excluded Contributions;
(11) repurchases of Capital Stock deemed to occur upon the exercise of stock options, warrants or other convertible securities, to the extent such Capital Stock represents a portion of the consideration for such exercise;
(12) the acquisition of any shares of Disqualified Capital Stock of the Company either (a) solely in exchange for shares of Disqualified Capital Stock of the Company or (b) through the application of the net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Disqualified Capital Stock of the Company;
(13) any purchase or redemption of Indebtedness that ranks junior to the Securities utilizing any Net Cash Proceeds remaining after the Company has complied with the requirements of the covenants described under Sections 4.17 and 4.18;
(14) if no Default or Event of Default shall have occurred and be continuing, the redemption, repurchase, retirement or other acquisition of any shares of the Company’s Common Stock, provided that, at the time of such redemption, repurchase, retirement or other acquisition and after giving pro forma effect thereto, the Consolidated Leverage Ratio would be no greater than 1.0 to 1.0; and
(15) if no Default or Event of Default shall have occurred and be continuing, payments of cash in lieu of the issuance of fractional shares upon the exercise of warrants or upon the conversion or exchange of, or issuance of Capital Stock in lieu of cash dividends on, any Capital Stock the Company or any Restricted Subsidiary, which in the aggregate do not exceed $3.0 million. In determining the aggregate amount of Restricted Payments made after the Issue Date in accordance with clause (c) of the immediately preceding paragraph, amounts expended pursuant to clauses (1), (2), (3), (13) and (14) shall be evidenced by a Board Resolutionincluded in such calculation. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2)Payment, (3), (4), (6), (7) or (8)) the Company will shall deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted complies with this Indenture and setting forth in reasonable detail the basis upon which the required calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in which calculations may be based upon the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Company’s latest available internal quarterly financial statements.
Appears in 1 contract
Limitation on Restricted Payments. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary Qualified Capital Stock of the Company)) on or in respect of shares of the Company's Capital Stock to holders of such Capital Stock;
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct warrants, rights or indirect parent options to purchase or acquire shares of the Companyany class of such Capital Stock;
(3) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled final maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, any Indebtedness of the Company or a Guarantor that is subordinate or junior in right of payment to the Notes (except for the purchase, defeasance, redemption, defeasance prepayment or other acquisition of any such subordinate or junior Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereoffinal maturity, in each case, case due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition); or
(4) make any Restricted Investment (all such payments and other than Permitted Investments) (each of the foregoing actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph4) being referred to as a "Restricted Payment"), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus.
(b) 100% of the aggregate net cash proceeds received by the Company Notwithstanding clause (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)a) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
above and (c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cashbelow (once clause (c) becomes operative), the lesser of (i) provisions set forth in the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The immediately preceding provisions will paragraph do not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment dividend would have been permitted on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenturedeclaration;
(2) if no Default or Event of Default shall have occurred and be continuing, the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness shares of Capital Stock of the Company, either (i) solely in exchange for shares of Qualified Capital Stock of the Company or any Guarantor or (ii) through the appli- cation of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of, Equity Interests of shares of Qualified Capital Stock of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraphCompany;
(3) if no Default or Event of Default shall have occurred and be continuing, the defeasance, redemption, repurchase, retirement or other acquisition of subordinated any Indebtedness of the Company that is subordinate or any Guarantor with junior in right of payment to the net cash proceeds from an incurrence ofNotes either (i) solely in exchange for shares of Qualified Capital Stock of the Company, or in exchange for, Permitted (ii) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of (a) shares of Qualified Capital Stock of the Company or (b) Refinancing Indebtedness;
(4) the payment if no Default or Event of any dividend Default exists or distribution by a Restricted Subsidiary of would result therefrom, (A) the Company to the holders of its Equity Interests on a pro rata basis;
(5) the may pay amounts required for any repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company capital stock or any Restricted Subsidiary options to acquire capital stock of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement agreement
(5) or similar agreement agreement, or plan; otherwise upon their death, disability, retirement or termination of employment or departure from the board of directors of the Company (provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may capital stock and options (other than payments described in clause (4)(B)) shall not exceed (x) $2.0 million 1,000,000 in any twelve-month periodperiod or (y) $5,000,000 in the aggregate from and after the Closing Date) and (B) in addition to the amounts set forth in clause 4(A) the Company may pay amounts required under the Missouri Stock Option Agreements in effect on the Closing Date if the trading market for the common stock of the Company is not sufficiently liquid as provided therein;
(6) the acquisition redemption or repurchase of Equity Interests by the Company in connection with the exercise of stock options any Capital Stock or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company Company, including the Notes, if required by any Gaming Authority or if determined, in the good faith judgment of the Board of Directors, to be necessary to prevent the loss or to secure the grant or reinstatement of any gaming license or other right to conduct lawful gaming operations; and after the Conversion Date, Restricted Subsidiary Payments in an amount not to exceed $5.0 million in the aggregate.
(c) Notwithstanding clause (a) above, subsequent to the Conversion Date, if at the time of such Restricted Payment or immediately after giving effect thereto, (i) a purchase price Default or an Event of Default shall not greater have occurred and be continuing and (ii) the Company is able to incur at least $1.00 of additional Indebtedness (other than 101.0% of the principal amount thereof (plus accrued and unpaid interestPermitted Indebtedness) in the event of a Change of Control in accordance compliance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement6.1, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other may make Restricted Payments in an aggregate amount since May 11, 2004 from the Closing Date not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date in excess of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.sum of:
Appears in 1 contract
Sources: Senior Subordinated Credit Agreement (Ameristar Casinos Inc)
Limitation on Restricted Payments. (a) The Company will not, and will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly:
(1i) declare or pay any dividend on, or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with liquidation preference) on any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders shares of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such 's Capital Stock (other than dividends or distributions payable solely in Equity Interests (shares of its Qualified Capital Stock or in options, warrants or other than Disqualified rights to acquire shares of such Qualified Capital Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value value, directly or indirectly, its Capital Stock or any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition Capital Stock of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests Affiliate of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified any such Capital Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of owned by the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Wholly Owned Subsidiary of the Company) ofor options, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance warrants or other acquisition will be excluded from clause (3)(b) of the preceding paragraphrights to acquire such Capital Stock;
(3iii) the defeasancemake any principal payment on, redemption, or repurchase, retirement redeem, defease, retire or other acquisition of subordinated Indebtedness of the Company otherwise acquire for value, prior to any scheduled principal payment, sinking fund payment or maturity, any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Subordinated Indebtedness;
(4iv) the payment of declare or pay any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests (including, without limitation, any liquidation preference) on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value any Capital Stock of any Equity Interests of the Company or Subsidiary to any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of Person (other than (a) to the Company or any of its Restricted Wholly Owned Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares holders of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07of such Subsidiary on a pro rata basis); or
(9v) make any Investment in any Person (other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, than any Permitted Investments)
(1) immediately before and immediately after giving effect to, any to such proposed Restricted Payment permitted under the preceding clause (9)on a pro forma basis, no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The continuing; (2) immediately before and immediately after giving effect to such Restricted Payment on a pro forma basis, the Company could incur $1.00 of additional Indebtedness under the provisions contained in Section 1008(a); and (3) after giving effect to the proposed Restricted Payment, the aggregate amount of all such Restricted Payments declared or made after the date of the date hereof, does not exceed the sum of the following (other than cashthe "Basket"):
(A) will be (i) the fair market value Cumulative Operating Cash Flow determined at the time of such Restricted Payment less (ii) 150% of cumulative Consolidated Interest Expense determined for the period (treated as one accounting period) commencing on the date of the original issue of the Securities and ending on the last day of the most recent fiscal quarter immediately preceding the date of such Restricted Payment for which consolidated financial information of the asset(s) or securities proposed Company is required to be transferred available;
(B) (i) capital contributions to the Company after the date of this Indenture or issued (ii) the aggregate Net Cash Proceeds received after the date of this Indenture by the Company from the issuance or sale (other than to any of its Subsidiaries) of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such Qualified Capital Stock of the Company (except, in each case, to the extent such proceeds are used to purchase, redeem or otherwise retire Capital Stock or Subordinated Indebtedness as set forth below in clause (ii) or (iii) of paragraph (b) below);
(C) the aggregate Net Cash Proceeds received after the date of this Indenture by the Company (other than from any of its Subsidiaries) upon the exercise of any options, warrants or rights to purchase Qualified Capital Stock of the Company;
(D) the aggregate Net Cash Proceeds received after the date of this Indenture by the Company from the conversion or exchange, if any, of debt securities or Redeemable Capital Stock of the Company or its Subsidiaries into or for Qualified Capital Stock of the Company plus, to the extent such debt securities or Redeemable Capital Stock were issued after the date of this Indenture, the aggregate of Net Cash Proceeds from their original issuance; and
(E) in the case of the disposition or repayment of any Investment constituting a Restricted Payment, an amount equal to the return of capital with respect to such Investment and the initial amount of such Investment.
(b) Notwithstanding the foregoing, and in the case of clauses (ii) through (vi) below, so long as no Default or Event of Default shall have occurred and be continuing, the foregoing provisions of this covenant shall not prohibit the following actions (each of clauses (i) through (vii) below being referred to as a "Permitted Payment"):
(i) the payment of any dividend within 60 days after the date of declaration thereof, if at such date of declaration such payment was permitted by the provisions of paragraph (a) of this Section 1009 and such payment shall have been deemed to have been paid on such date of declaration and shall not have been deemed a Permitted Payment for purposes of the calculation required by paragraph (a) of this Section 1009;
(ii) the repurchase, redemption, or other acquisition or retirement for value of any shares of any class of Capital Stock of the Company in exchange for (including any such exchange pursuant to the exercise of a conversion right or privilege in connection with which cash is paid in lieu of the issuance of fractional shares or scrip), or out of the Net Cash Proceeds of a substantially concurrent issuance and sale for cash (other than to a Subsidiary) of, other shares of Qualified Capital Stock of the Company; provided that the Net Cash Proceeds from the issuance of such shares of Qualified Capital Stock are excluded from clause (v) (3)(B) of paragraph (a) of this Section 1009;
(iii) the repurchase, redemption, defeasance, retirement or acquisition for value or payment of principal of any Subordinated Indebtedness or Redeemable Capital Stock in exchange for, or in an amount not in excess of the Net Cash Proceeds of, a substantially concurrent issuance and sale for cash (other than to any Subsidiary of the Company) of any Qualified Capital Stock of the Company, provided that the Net Cash Proceeds from the issuance of such shares of Qualified Capital Stock are excluded from clause (v) (3)(B) of paragraph (a) of this Section 1009;
(iv) the repurchase, redemption, defeasance, retirement, refinancing, acquisition for value or payment of principal of any Subordinated Indebtedness (other than Redeemable Capital Stock) (a "refinancing") through the substantially concurrent issuance of new Subordinated Indebtedness of the Company, provided that any such new Subordinated Indebtedness (1) shall be in a principal amount that does not exceed the principal amount so refinanced (or, if such Subordinated Indebtedness provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, then such lesser amount as of the date of determination), plus the lesser of (I) the stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Indebtedness being refinanced or (II) the amount of premium or other payment actually paid at such time to refinance the Indebtedness, plus, in either case, the amount of expenses of the Company incurred in connection with such refinancing; (2) has an Average Life to Stated Maturity greater than the remaining Average Life to Stated Maturity of the Securities; (3) has a Stated Maturity for its final scheduled principal payment later than the Stated Maturity for the final scheduled principal payment of the Securities; and (4) is expressly subordinated in right of payment to the Securities at least to the same extent as the case may beSubordinated Indebtedness to be refinanced;
(v) the repurchase, redemption, defeasance, retirement, refinancing, acquisition for value or payment of any Redeemable Capital Stock through the substantially concurrent issuance of new Redeemable Capital Stock of the Company, provided that any such new Redeemable Capital Stock (1) shall have an aggregate liquidation preference that does not exceed the aggregate liquidation preference of the amount so refinanced; (2) has an Average Life to Stated Maturity greater than the remaining Average Life to Stated Maturity of the Securities; and (3) has a Stated Maturity later than the Stated Maturity for the final scheduled principal payment of the Securities;
(vi) the repurchase of shares of, or options to purchase shares of, common stock of the Company or any of its Subsidiaries from employees, former employees, directors or former directors of the Company or any of its Subsidiaries (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer terms of the Company and, in the case of amounts of $50.0 million agreements (including employment agreements) or more, plans (or amendments thereto) approved by the Board of Directors under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such common stock; provided, however, that the aggregate amount of such repurchases in any calendar year shall not exceed $500,000 individually and $2.5 million in the aggregate; and
(vii) the repurchase or redemption of warrants to purchase shares of Common Stock issued in connection with the Company's initial public offering that are outstanding prior to the Issue Date of the Securities in an amount which shall not exceed $100,000 in the aggregate and the repurchase of Common Stock of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07through open market purchases, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled an aggregate amount not to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.exceed $1,000,000. 84
Appears in 1 contract
Limitation on Restricted Payments. The Company will notnot make, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, make, any Restricted Payment, unless:
(1a) declare no Default or pay any dividend or make any other payment or distribution on account Event of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments Default shall have occurred and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, be continuing at the time of and or immediately after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2b) the Company would, at the time of such Restricted Payment and immediately after giving pro forma effect thereto as if to such Restricted Payment had been made at (and the beginning incurrence of any Indebtedness or the applicable four-quarter periodissuance of any Preferred Stock in connection therewith), have been permitted the Company’s Senior Leverage Ratio is less than 3.0 to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.091; and
(3c) immediately after giving effect to such Restricted Payment, together with the aggregate of all Restricted Payments declared or made after the Existing Notes Issue Date does not exceed the sum of (without duplication):
(1) 100% of the Company’s Cumulative EBITDA minus 1.4 times the Company’s Cumulative Consolidated Interest Expense; plus
(2) 100% of the aggregate Net Proceeds and the fair market value of securities or other property received by the Company, after January 1, 2001, from (a) the issue or sale of Capital Stock (other than Disqualified Capital Stock or Capital Stock of the Company issued to any Subsidiary of the Company) of the Company or any Indebtedness or other securities of the Company convertible into or exercisable or exchangeable for Capital Stock (other than Disqualified Capital Stock) of the Company which has been so converted or exercised or exchanged, as the case may be, (b) any capital contribution to the Company from Parent (except as contemplated by clause (vi) of the following paragraph), and (c) any loans made to the Company by Parent prior to the Existing Notes Issue Date upon the cancellation of such loans by Parent; plus
(3) the net reductions in Investments (other than reductions in Permitted Investments) in any Person resulting from payments of interest on Indebtedness, dividends, repayments of loans, partial or total releases or discharges of Guaranteed Permitted Unrestricted Subsidiary Obligations, or from designations of Unrestricted Subsidiaries as Restricted Subsidiaries, valued in each case at the fair market value thereof, not to exceed the amount of all other Restricted Payments Investments previously made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), in such Person; plus
(4)) upon the cancellation or termination of the Mirror Loan Indebtedness or conversion of the Mirror Loan Indebtedness into equity, the balance of the Mirror Loan Indebtedness so cancelled, terminated or converted, provided that if in connection therewith, the Company shall receive Net Proceeds, securities or other property as described in subclauses (6)c)(2)(a) or (b) above, then the aggregate amount of the increase in the Restricted Payment basket under this clause (7c) shall be the greater of (a) the amount provided in this subclause (4) and (8) of b) the next succeeding paragraph), is less than the sum, without duplication, of:
aggregate amount described in subclauses (ac)(2)(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
or (b) 100% above, in respect of the aggregate net cash proceeds received by the Company (including the fair market value such transaction. For purposes of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
determining under this clause (c) to the extent that any amount expended for Restricted Investment that was made after May 11Payments, 2004 is sold for cash or otherwise liquidated or repaid for cash, distributed shall be valued at the lesser of (i) the face amount thereof and property other than cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such shall be valued at its fair market value as determined by the Board of Directors of the date on which such Subsidiary was originally designated as an Unrestricted SubsidiaryCompany reasonably and in good faith. The preceding provisions will of this Section 4.11 shall not prohibit:
(1i) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may bethereof, if the dividend, distribution or redemption payment on the at such date of declaration or the date of the notice of redemption, as the case may be, such payment would have complied comply with the provisions of this Indenture; provided, however, that in calculating the Indentureaggregate amount of Restricted Payments for purposes of Section 4.11(c), such amounts declared shall be included in the calculation but such amounts expended shall be excluded from the calculation;
(2ii) the redemption, repurchase, retirement, defeasance or other acquisition retirement of any subordinated shares of Capital Stock of the Company or Indebtedness of the Company which is subordinated or any Guarantor pari passu in right of payment to the Notes by conversion into, or of any Equity Interests of the Company by or in exchange for, shares of Capital Stock (other than Disqualified Capital Stock), or out of the net cash proceeds Net Proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of other shares of Capital Stock of the Company (other than Disqualified Capital Stock); provided, with a sale being deemed substantially concurrent if such redemptionhowever, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds Net Proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will retirement shall be excluded from clause (3)(bc)(2) of this Section 4.11, provided further, however, that in calculating the preceding paragraphaggregate amount of Restricted Payments for purposes of Section 4.11(c), amounts expended pursuant to this clause (ii) shall be excluded from the calculation;
(3iii) the defeasance, redemption, repurchase, redemption or retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with which is subordinated in right of payment to the net cash proceeds from an incurrence of, or Notes in exchange for, Permitted Refinancing Indebtednessby conversion into, or out of the Net Proceeds of, a substantially concurrent sale or incurrence of Indebtedness (it being understood that a redemption or retirement or irrevocable deposit for redemption or retirement of Indebtedness within 45 days of such sale or incurrence shall be deemed “substantially concurrent”) of the Company (other than any Indebtedness owed to a Subsidiary of the Company) that is contractually subordinated in right of payment to the Notes to at least the same extent as the subordinated Indebtedness being redeemed or retired and (x) has a Stated Maturity no earlier than the 91st day after the Maturity Date or the final maturity date of the Indebtedness being redeemed or retired, whichever is earlier and (y) has an Average Life to Stated Maturity equal to or greater than the remaining Average Life to Stated Maturity of the Indebtedness being redeemed or retired; provided, however, that the amount of any such Net Proceeds that are utilized for any such redemption or retirement shall be excluded from clause (c)(2) of this Section 4.11, provided further, however, that in calculating the aggregate amount of Restricted Payments for purposes of Section 4.11(c) amounts expended pursuant to this clause (iii) shall be excluded from the calculation;
(4iv) the funding of loans (but not including the forgiveness of any such loan) to executive officers, directors and shareholders for relocation loans, bonus advances and other purposes consistent with past practices or the purchase, redemption or other acquisition for value of shares of Capital Stock of the Parent or the Company (other than Disqualified Capital Stock) or options on such shares held by the Parent’s or the Company’s or the Restricted Subsidiaries’ officers or employees or former officers or employees (or their estates or trusts or beneficiaries under their estates or trusts for the benefit of such beneficiaries) upon the death, disability, retirement or termination of employment of such current or former officers or employees pursuant to the terms of an employee benefit plan or any other agreement pursuant to which such shares of Capital Stock or options were issued or pursuant to a severance, buy-sell or right of first refusal agreement with such current or former officer or employee; provided that the aggregate amount of any such loans funded and cash consideration paid, or distributions made, pursuant to this clause (iv) do not in any one fiscal year exceed $7 million; provided further, however, that in calculating the aggregate amount of Restricted Payments for purposes of Section 4.11(c), amounts expended pursuant to this clause (iv) shall be excluded from the calculation;
(v) the making of Investments in Unrestricted Subsidiaries and joint ventures in an aggregate amount not to exceed $30 million since the Issue Date; provided, however, that the Company or the Restricted Subsidiaries may make additional Investments pursuant to this clause (v) up to an aggregate amount not to exceed $20 million if the Company is able, at the time of any such Investment and immediately after giving effect thereto, to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.10; provided further, however, that in calculating the aggregate amount of Restricted Payments made subsequent to the Issue Date for purposes of Section 4.11(c), amounts expended pursuant to this clause (v) shall be included in the calculation;
(vi) the payment of interest and principal on the Mirror Loan Indebtedness and/or the payment of any dividend or the making of any distribution to Parent (including (x) distributions to Parent of all or any portion of the net cash proceeds from the issuance of the Notes and (y) distributions to Parent that are contributed as equity to the Company and then applied by a Restricted Subsidiary the Company to repay principal of Mirror Loan Indebtedness) in an aggregate amount pursuant to this clause (vi) (net of any contributions to the equity of the Company contemplated above) not to exceed an amount sufficient to permit Parent to pay (and which, to the holders extent not contributed to the capital of its Equity Interests the Company on or prior to the date on which the Convertible Notes are no longer outstanding, are actually used by Parent to pay) interest and principal on the Convertible Notes (including pursuant to any repurchase by Parent of the Convertible Notes) at a pro rata basisprice not to exceed 100% of the principal amount thereof plus accrued and unpaid interest thereon (and any fees and expenses in connection with any repurchase of the Convertible Notes); provided, however, that (x) in connection with any repayment or repurchase of any principal amount of the Convertible Notes with amounts distributed pursuant to this clause (vi) there is a corresponding reduction in the outstanding principal amount of the Mirror Loan Indebtedness and (y) in calculating the aggregate amount of Restricted Payments for purposes of Section 4.11(c), amounts expended pursuant to this clause (vi) shall be excluded from the calculation;
(vii) distributions by the Company to Parent to permit Parent to pay obligations actually incurred by Parent in respect of the payment of operating expenses of the Company or the Restricted Subsidiaries in an aggregate amount in any fiscal year not to exceed 5% of the total operating expenses of the Company and the Restricted Subsidiaries on a consolidated basis determined in accordance with GAAP and Tax Payments permitted by Section 4.14(b)(v); provided, however, that in calculating the aggregate amount of Restricted Payments for purposes of Section 4.11(c), amounts expended pursuant to this clause (vii) shall be excluded from the calculation;
(viii) other Restricted Payments in an aggregate amount not to exceed $500,000 in any fiscal year of the Company; provided, however, that in calculating the aggregate amount of Restricted Payments made subsequent to the Issue Date for purposes of Section 4.11(c), amounts expended pursuant to this clause (viii) shall be included in the calculation; and
(ix) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided Indebtedness that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of is contractually subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment Guarantees in connection accordance with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 millionSections 4.13 and 4.19; provided, however, that at the time ofall Notes tendered in connection with a Change of Control Offer or Excess Proceeds Offer, and after giving effect toas applicable, have been repurchased, redeemed or acquired for value prior to any Restricted Payment permitted under the preceding being made pursuant to this clause (9ix); provided further, no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The however, that in calculating the aggregate amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9for purposes of Section 4.11(c), or is entitled to be made amounts expended pursuant to this clause (ix) shall be excluded from the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07calculation.
Appears in 1 contract
Sources: Indenture (Lamar Advertising Co/New)
Limitation on Restricted Payments. The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary Qualified Capital Stock of the Company)) on or in respect of shares of the Company’s Capital Stock to holders of such Capital Stock;
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent Capital Stock of the Company;
(3) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled final maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchase, redemption, defeasance or other acquisition any Subordinated Indebtedness of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment the Company or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionGuarantors; or
(4) make any Restricted Investment (all such payments and other than Permitted Investments) (each of the foregoing actions set forth in these clauses (1), (2), (3) through and (4) above being collectively referred to as a “Restricted PaymentsPayment”). Notwithstanding the foregoing, unless, at the time of and after giving effect to such Restricted Paymentprovisions set forth in the immediately preceding paragraph do not prohibit:
(1) [Intentionally omitted and any cross-references hereto shall have no effect];
(2) if no Default or Event of Default shall have occurred and be continuing, the acquisition of any shares of Capital Stock of the Company, either (i) in exchange for shares of Qualified Capital Stock of the Company, (ii) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company or (iii) a combination thereof;
(3) [Intentionally omitted and any cross—references hereto shall have no effect];
(4) so long as no Default or Event of Default shall have occurred and be continuing, repurchases by the Company of Common Stock of the Company from officers, directors and employees of the Company or any of its Subsidiaries (other than officers, directors or employees that are Permitted Holders or any Affiliates thereof) in an amount not to exceed $1.0 million in any twelve month period;
(5) so long as no Default or Event of Default has occurred and is continuing continuing, the declaration and payment of dividends to holders of any class or would occur as a consequence series of Disqualified Capital Stock of the Company issued after the Issue Date in accordance with Section 4.9 hereof and otherwise in accordance with the terms of this Indenture to the extent such Restricted Paymentdividends are included in the definition of “Consolidated Interest Expense” but excluding the declaration and payment of dividends with respect to the Company’s 12 3/4% Cumulative Exchangeable Preferred Stock and any Refinancing thereof;
(26) repurchases of Capital Stock deemed to occur upon the Company would, at the time exercise of such Restricted Payment and after giving pro forma effect thereto as stock options if such Restricted Payment had been made at the beginning Capital Stock represents a portion of the applicable fourexercise price thereof;
(7) [Intentionally omitted and any cross-quarter periodreferences hereto shall have no effect]
(8) any purchase or redemption of subordinated obligations as a result of a Change of Control, provided that the offer to purchase pursuant to Sections 3.9 and 4.15 hereof shall have been permitted consummated prior to incur at least $1.00 any such purchase; or
(9) any purchase or redemption of, and payment of additional Indebtedness the consent fee with respect to, the 8 7/8% Notes pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and8 7/8% Notes Tender Offer.”
(3d) such Restricted Payment, together Section 4.9(a) is hereby deleted in its entirety and replaced with the aggregate amount following:
(a) The Company will not, and will not permit any of all its Restricted Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, acquire, become liable, contingently or otherwise, with respect to, or otherwise become responsible for payment of (collectively, “incur”) any Indebtedness (other Restricted Payments made by than Permitted Indebtedness); provided, however, that solely for purposes of determining (and for purposes of clarity not for incurring) whether the Company and its Restricted Subsidiaries after May 11, 2004 are permitted to (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7i) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is effect a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital merger or from the issue consolidation or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation assets under Section 5.1 or (ii) such fair market value as designate Unrestricted Subsidiaries in accordance with the definition of the date on which such Subsidiary was originally designated as an “Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of ,” the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of and its Restricted Subsidiaries pursuant will be deemed to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all be able to incur such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), if no Default or Event of Default shall have occurred and be continuing at the time of or would be caused thereby. The amount as a consequence of all Restricted Payments (other than cash) will be the fair market value deemed incurrence of any such Indebtedness if on the date of the Restricted Payment deemed incurrence of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted SubsidiaryIndebtedness, as the case may be, pursuant after giving effect to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determineddeemed incurrence thereof, in the case of amounts under $50.0 million, by an officer Consolidated Leverage Ratio of the Company andshall not be greater than 7.5 to 1.0; provided, in however, that any Indebtedness of a Person existing at the case of amounts of $50.0 million time such Person becomes or moreceases to be a Restricted Subsidiary (whether by merger, by consolidation, acquisition or otherwise) shall be deemed to be incurred at the Board of Directors time it becomes or ceases to be a Restricted Subsidiary.”
(e) Section 4.10 of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment Indenture is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part hereby deleted in its sole discretion) such Restricted Payment in any manner that complies entirety and replaced with this Section 4.07.the following:
Appears in 1 contract
Sources: Second Supplemental Indenture (Granite Broadcasting Corp)
Limitation on Restricted Payments. The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
(1a) declare or pay any dividend or make any distribution (other payment than dividends 50 or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation distributions made to which the Company or any Wholly-Owned Subsidiary of its Restricted Subsidiaries is a party) the Company and other than any dividend or to the direct or indirect holders distribution payable solely in Qualified Capital Stock of the Company’s ) on or any in respect of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary shares of the Company)'s Capital Stock to holders of such Capital Stock;
(2b) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct warrants, rights or indirect parent options to purchase or acquire shares of any class of such Capital Stock (other than the exchange of such Capital Stock or any warrants, rights or options to acquire shares of any class of Capital Stock of the Company for Qualified Capital Stock of the Company);
(3c) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value value, prior to any scheduled final maturity, scheduled repayment or scheduled sinking fund payment, any Indebtedness of the Company or a Subsidiary Guarantor that is subordinated subordinate or junior in right of payment to the Notes or the such Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionGuarantor's Guarantee; or
(4d) make any Restricted Investment (all such payments and other than Permitted Investments) (each of the foregoing actions set forth in these clauses (1a), (b), (c) through and (4d) above being collectively referred to as “a "Restricted Payments”Payment"), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, if at the time of such Restricted Payment and or immediately after giving pro forma effect thereto as if such Restricted Payment had been made at thereto, (i) a Default or an Event of Default shall have occurred and be continuing, or (ii) the beginning of the applicable four-quarter period, have been permitted Company is not able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)Permitted Indebtedness) since May 11in compliance with Section 4.12, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (iiii) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (including such proposed Restricted Payment) made subsequent to the Issue Date (the amount expended for such purposes, if other than in cash) will be , being the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, property as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, determined reasonably and in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, good faith by the Board of Directors of the Company, whose determination ) shall be evidenced by a Board Resolution. Not later than exceed the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.sum of:
Appears in 1 contract
Sources: Indenture (3003969 Nova Scotia LTD)
Limitation on Restricted Payments. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
, (1a) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Qualified Capital Stock) on or in respect of shares of Capital Stock of the Company or payable to the Company or a Restricted Subsidiary holders of the Company);
such Capital Stock, (2b) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct warrants, rights or indirect parent options to purchase or acquire shares of any class of such Capital Stock, other than the Company;
exchange of such Capital Stock for Qualified Capital Stock, (3c) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled final maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date Company that is subordinate or junior in right of such paymentpayment to the Notes, purchase, redemption, defeasance or other acquisition; or
(4d) make any Restricted Investment (all such payments and other than Permitted Investments) in any other Person (each of the foregoing actions set forth in these clauses (1a), (b), (c) through and (4d) above (other than the exceptions thereto) being collectively referred to as “a "Restricted Payments”Payment"), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, if at the time of such Restricted Payment and or immediately after giving pro forma effect thereto as if such Restricted Payment had been made at thereto, (i) a Default or an Event of Default shall have occurred and be continuing, (ii) the beginning of the applicable four-quarter period, have been permitted Company is not able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth (other than Permitted Indebtedness) in the first paragraph of compliance with Section 4.09; and
4.3 or (3iii) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by subsequent to the Company and its Restricted Subsidiaries after May 11, 2004 Issue Date shall exceed the sum of: (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(aw) 50% of the cumulative Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, or if such cumulative Consolidated Net Income for such period is shall be a deficitloss, less minus 100% of such deficitloss) of the Company earned subsequent to the Issue Date and on or prior to the date the Restricted Payment occurs (the "Reference Date") (treating such period as a single accounting period), plus
; plus (bx) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of from any Additional Assets to the extent acquired in consideration of Equity Interests of the Company Person (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company) from the issuance and sale subsequent to the Issue Date and on or prior to the Reference Date of Qualified Capital Stock of the Company (including Qualified Capital Stock issued upon the conversion of convertible Indebtedness or in exchange for outstanding Indebtedness but excluding net cash proceeds from the sale of Qualified Capital Stock to the extent used to repurchase or acquire shares of Capital Stock of the Company pursuant to clause (2)(ii) of the next succeeding paragraph); plus (y) without duplication of any amounts included in clause (iii) (x) above, plus
100% of the aggregate net cash proceeds of any equity contribution received by the Company from a holder of the Company's Capital Stock; plus (cz) to the extent that any Restricted Investment (other than a Permitted Investment) that was made after May 11, 2004 the Issue Date is sold for cash or otherwise liquidated or repaid for cash, the lesser of (iA) the cash return of capital received with respect to such Restricted sale, liquidation or repayment of such Investment (less the cost of dispositionsuch sale, liquidation or repayment, if any) and (iiB) the initial amount of such Restricted Investment, plus
(d) but only to the extent that any Unrestricted Subsidiary not included in the calculation of Consolidated Net Income. Any net cash proceeds included in the foregoing clauses (iii)(x) or (iii)(y) shall not be included in clause (x)(A) or clause (x)(B) of the Company is redesignated as definition of "Permitted Investments" to the extent actually utilized to make a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:Payment under this paragraph.
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, such redemption if the dividend, distribution dividend or redemption payment on the date of declaration or the date of the notice of redemptionredemption price, as the case may be, would have complied with been permitted on the provisions date of the Indenture;
declaration or notice; (2) if no Default or Event of Default shall have occurred and be continuing as a consequence thereof, the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness shares of Capital Stock of the Company or any Guarantor or Company, either (i) solely in exchange for shares of any Equity Interests Qualified Capital Stock of the Company in exchange forCompany, or out (ii) through the application of the net cash proceeds of the a substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of shares of Qualified Capital Stock of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such saleCompany; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, so long as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred or be continuing, payments for the purpose of and in an amount equal to the amount required to permit the Company to redeem or repurchase shares of its Capital Stock or options in respect thereof, in each case in connection with the repurchase provisions under employee stock option or stock purchase agreements or other agreements to compensate management employees; provided that such redemptions or repurchases pursuant to this clause (3) shall not exceed $5.0 million in the aggregate since the Issue Date (which amount shall be continuing or would be caused thereby. The increased by the amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed any cash proceeds to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant from (x) sales of its Capital Stock to management employees subsequent to the Restricted Payment. The fair market value of Issue Date and (y) any assets "key-man" life insurance policies which are used to make such redemptions or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2repurchases), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.;
Appears in 1 contract
Limitation on Restricted Payments. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, take the following actions:
(1i) declare or pay any dividend on, or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitationto holders of, any payment in connection with any merger or consolidation to which shares of Capital Stock of the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Subsidiary (other than dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) shares of Qualified Capital Stock of the Company or payable such Restricted Subsidiary or in options, warrants or other rights to purchase Qualified Capital Stock of the Company or a such Restricted Subsidiary of the CompanySubsidiary);
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct or indirect parent Affiliate thereof (other than any Wholly Owned Restricted Subsidiary of the Company) or any options, warrants or other rights to acquire such Capital Stock (other than the purchase, redemption, acquisition or retirement of any Disqualified Capital Stock of the Company solely in shares of Qualified Capital Stock of the Company);
(3iii) make any principal payment on or with respect to, or purchaserepurchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled repayment principal payment, scheduled sinking fund payment or scheduled maturity, any Subordinated Indebtedness, except a payment, purchase, redemption, defeasance or other acquisition of in any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year case out of the date proceeds of such paymentPermitted Refinancing Indebtedness, purchase, redemption, defeasance or other acquisition; or
(4iv) make any Restricted Investment Investment; (all such payments and or other actions set forth described in these clauses (1i) through (4iv) above being collectively referred to as “"Restricted Payments”"), unless, unless at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such proposed Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemptionRestricted Payment, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (if other than cash) will , shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, amount determined by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a Board Resolution. Not ), (A) no Default or Event of Default shall have occurred and be continuing, (B) the Company could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) in accordance with Section 6.9(a) hereof and (C) the aggregate amount of all Restricted Payments declared or made after the date of this Supplemental Indenture shall not exceed the sum (without duplication) of the following:
(1) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on February 1, 2004 and ending on the last day of the Company's last fiscal quarter ending prior to the date of such proposed Restricted Payment (or, if such Consolidated Net Income shall be a loss, minus 100% of such loss), plus
(2) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after the date of this Supplemental Indenture by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company, plus
(3) the aggregate Net Cash Proceeds, or the Fair Market Value of Property other than cash, received after the date of this Supplemental Indenture by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company, plus
(4) the aggregate Net Cash Proceeds received after the date of this Supplemental Indenture by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange, plus
(5) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after the date of this Supplemental Indenture from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of "Investment"), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after the date of this Supplemental Indenture.
(b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (iii), (iv), (v) and (vii) below) no Default or Event of Default shall have occurred and be continuing:
(i) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above);
(ii) the payment of any dividend payable from a Restricted Subsidiary to the Company or any other Restricted Subsidiary of the Company;
(iii) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company;
(iv) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company;
(v) the purchase, redemption, repayment, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (other than Disqualified Capital Stock) in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent incurrence (other than to a Restricted Subsidiary) of Subordinated Indebtedness of the Company so long as (A) the principal amount of such new Indebtedness does not exceed the principal amount (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, repaid, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of expenses of the Company incurred in connection with such refinancing, (B) such new Indebtedness is subordinated to the Securities at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, repaid, defeased, acquired or retired, and (C) such new Indebtedness has an Average Life to Stated Maturity that is longer than the Average Life to Stated Maturity of the Securities and such new Indebtedness has a Stated Maturity for its final scheduled principal payment that is at least 91 days later than the date Stated Maturity for the final scheduled principal payment of making the Securities;
(vi) loans made to officers, directors or employees of the Company or any Restricted Payment Subsidiary approved by the Board of Directors of the Company in an aggregate amount not to exceed $1,000,000 outstanding at any one time, the proceeds of which are used solely (excluding any A) to purchase common stock of the Company in connection with a restricted stock or employee stock purchase plan, or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the exercise price of such stock options or (B) to refinance loans, together with accrued interest thereon, made pursuant to item (A) of this clause (v); and
(vii) other Restricted Payment Payments in an aggregate amount not to exceed $10,000,000. The actions described in the preceding clause clauses (2i), (3iii), (4iv) and (vi) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) (provided that any dividend paid pursuant to clause (i) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (3) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (i)), and the actions described in clauses (ii), (6v) and (vii) of this paragraph (b) shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a).
(c) In computing Consolidated Net Income under paragraph (a) above, (7) or (8)1) the Company will deliver shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the Trustee an Officers’ Certificate stating financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment is would in the good faith determination of the Company be permitted and setting forth under the basis upon which the calculations required by requirements of this Section 4.07 were computed. For purposes of determining Supplemental Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Section 4.07, Supplemental Indenture notwithstanding any subsequent adjustments made in good faith to the event that a Restricted Payment meets the criteria of more than one Company's financial statements affecting Consolidated Net Income of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in for any manner that complies with this Section 4.07period.
Appears in 1 contract
Sources: First Supplemental Indenture (Comstock Resources Inc)
Limitation on Restricted Payments. The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
, (1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary Qualified Capital Stock of the Company);
) on or in respect of shares of the Company's Capital Stock to holders of such Capital Stock; (2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct warrants, rights or indirect parent options to purchase or acquire shares of any class of such Capital Stock of the Company;
; (3) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled final maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date Company that is subordinate or junior in right of such payment, purchase, redemption, defeasance payment to the Securities or any Guarantee (other acquisitionthan Indebtedness described in clause (7) of the definition of "Permitted Indebtedness"); or
or (4) ---------------------- make any Restricted Investment (all such payments and other than Permitted Investments) (each of the foregoing actions set forth in these clauses (1), (2), (3) through and (4) above being collectively referred to as “a "Restricted Payments”Payment"), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, if at the time of such Restricted Payment and or immediately ------------------ after giving pro forma effect thereto as if such Restricted Payment had been made at thereto:
(a) a Default or an Event of Default shall have occurred and be continuing; or
(b) the beginning of the applicable four-quarter period, have been permitted Company is not able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth (other than Permitted Indebtedness) in the first paragraph of compliance with Section 4.094.4; andor
(3c) such Restricted Payment, together with the aggregate amount of all other Restricted Payments (including such proposed Restricted Payment) made subsequent to the Issue Date (the amount expended for such purposes, if other than in cash, being the fair market value of such property as determined reasonably and in good faith by the Board of Directors of the Company whose determination shall be conclusive) shall exceed the sum of:
(i) 50% of the cumulative Consolidated Net Income (or if cumulative Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company earned subsequent to the Issue Date and on or prior to the date the Restricted Payment occurs (the "Reference Date") (treating such period as -------------- a single accounting period); plus
(ii) 100% of the aggregate Net Cash Proceeds and the fair market value, as determined in good faith by the Board of Directors of the Company, of property other than cash received by the Company from any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to the Issue Date and on or prior to the Reference Date of Qualified Capital Stock of the Company (other than Excluded Contributions); plus
(iii) without duplication of any amounts included in clause (c)(ii) above, 100% of the aggregate Net Cash Proceeds of any equity contribu- tion received by the Company from a holder of the Company's Capital Stock (other than Excluded Contributions); plus
(iv) the amount by which Indebtedness of the Company or any of its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) is reduced on the Company's balance sheet upon the conversion or exchange subsequent to the Issue Date of any Indebtedness of the next succeeding paragraph), is less than Company or any of its Restricted Subsidiaries incurred after the sum, Issue Date into or for Qualified Capital Stock; plus
(v) without duplication, the sum of:
(a) 50% of the Consolidated Net Income of the Company for the period aggregate amount returned in cash on or with respect to Investments (taken as one accounting periodother than Permitted Investments) from April 1, 2004 made subsequent to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (orIssue Date whether through interest payments, if such Consolidated Net Income for such period is a deficitprincipal payments, less 100% of such deficit), plusdividends or other distributions or payments;
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of or any Additional Assets to the extent acquired in consideration of Equity Interests Restricted Subsidiary of the Company from the disposition of all or any portion of such Investments (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus; and
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser upon redesignation of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any an Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11Subsidiary, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary (valued in each case as provided in the definition of "Investment"); ---------- provided, however, that the date sum of clauses (a), (b) and (c) above shall not -------- ------- exceed the aggregate amount of all such redesignation Investments made by the Company or (ii) such fair market value as of any Restricted Subsidiary in the date on which such relevant Person or Unrestricted Subsidiary was originally designated as an Unrestricted Subsidiarysubsequent to the Issue Date. The Notwithstanding the foregoing, the provisions set forth in the immediately preceding provisions will paragraph do not prohibit:
(1) the payment of any dividend or other distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, other distribution if the dividend, dividend or other distribution or redemption payment would have been permitted on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenturedeclaration;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing continuing, the acquisition of any shares of Capital Stock of the Company, either (a) solely in exchange for shares of Qualified Capital Stock of the Company or would be caused thereby. The amount Qualified Capital Stock of all Restricted Payments Holdings, or (b) through the application of net proceeds of a substantially concurrent sale for cash (other than cash) will be the fair market value on the date to a Subsidiary of the Restricted Payment Company) of shares of Qualified Capital Stock of the asset(sCompany or, to the extent the proceeds therefrom are contributed by Holdings to the Company, from the shares of Capital Stock of Holdings;
(3) if no Default or securities proposed Event of Default shall have occurred and be continuing, the acquisition of any Indebtedness of the Company that is subordinate or junior in right of payment to the Securities or a Guarantee either (a) solely in exchange for shares of Qualified Capital Stock of the Company or Holdings, or (b) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of (i) shares of Qualified Capital Stock of the Company or Holdings, or (ii) Refinancing Indebtedness;
(4) if no Default or Event of Default shall have occurred and be transferred or issued continuing, repurchases by the Company or any Restricted Subsidiary of the Company of, or dividends, distributions or advances to Holdings to allow Holdings to repurchase (and/or to make payments on notes theretofore issued by Holdings representing the consideration for the previous repurchase of), securities of Holdings or the Company from employees, directors or consultants of Holdings, the Company or any Subsidiaries of the Company or their authorized representatives (a) upon the death, disability or termination of employment of such Restricted Subsidiaryemployees, as directors or consultants or to the case may be, extent required pursuant to employee benefit plans, employment agreements or consulting agreements or (b) pursuant to any other agreements with such employees or directors of or consultants to Holdings, the Company or any Subsidiaries of the Company, in an aggregate amount not to exceed $7.5 million in any calendar year (with unused amounts in any calendar year being carried over to succeeding years subject to a maximum of $15.0 million in any calendar year), provided that the cancellation of -------- Indebtedness owing to the Company or any Restricted Payment. The fair market value Subsidiary of the Company from such employees, directors or consultants of the Company or any of its Restricted Subsidiaries in connection with a repurchase of Capital Stock of the Company will not be deemed to constitute a Restricted Payment under this Indenture;
(5) the declaration and payment of dividends to holders of any assets class or securities series of Preferred Stock of the Company, provided that for the most recently ended four full fiscal quarters for which internal financial statements are required available immediately preceding the date of issuance of such Preferred Stock, after giving effect to be valued by this covenant will be determinedsuch issuance on a pro forma basis, --- ----- the Company would have been able to incur at least $1.00 of Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.4;
(6) the payment of dividends on the Company's Common Stock (or dividends, distributions or advances to Holdings to allow Holdings to pay dividends on Holdings' Common Stock), following the first public offering of the Company's Common Stock (or of Holdings' Common Stock) after the Issue Date, of (i) in the case of amounts under $50.0 million, by an officer the first public offering of the Company's Common Stock, up to 6% per annum of the net proceeds received by the Company andin such public offering, or (ii) in the case of amounts the first public offering of Holdings' Common Stock, up to 6% per annum of the amount contributed by Holdings from the proceeds received by Holdings from such offering, other than, in each case, public offerings with respect to the Company's Common Stock (or Holdings' Common Stock) registered on Form S-8 (or any successor form);
(7) the payment of dividends, distributions or advances to Holdings to allow Holdings to repurchase, retire or otherwise acquire or retire for value any Securities of Holdings, in existence on the Issue Date and from the Persons holding such Securities on the Issue Date and which are not held by Apollo or any of its Affiliates or members of management of the Company and its Subsidiaries on the Issue Date (including any equity interests issued in respect of any such securities constituting equity interests as a result of a stock split, recapitalization, merger, combination, consolidation or similar transaction), provided, however, that -------- ------- the Company shall be permitted to make Restricted Payments under this clause only if after giving effect thereto, the Company would be permitted to incur at least $50.0 million 1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.4;
(8) other Restricted Payments in an aggregate amount not to exceed $15.0 million;
(9) if no Default or moreEvent of Default shall have occurred and be continuing, payments or distributions to, or dividends, distributions or advances to Holdings to allow Holdings to make payments or distributions to, dissenting stockholders pursuant to applicable law, pursuant to or in connection with a consolidation, merger or transfer of assets that complies with the provisions of this Indenture applicable to mergers, consolidations and transfers of all or substantially all of the property and assets of the Company;
(10) Investments that are made with Excluded Contributions;
(11) any payments made to consummate the Transactions pursuant to or contemplated by the Merger Agreement and any other agreements related to the Recapitalization in effect on the closing date of the Recapitalization, including payments made by the Company to Holdings to allow Holdings to satisfy its obligations under such agreements or documents, in each case, as such agreements or documents are in effect on the Issue Date as amended from time to time so long as such amendment is in the good faith judgment of the Board of Directors of the Company not more disadvantageous to the Holders of the Securities in any material respect than such agreement or document as in effect on the Issue Date;
(12) repurchases of Capital Stock deemed to occur upon the exercise of stock options, warrants or other convertible securities, to the extent such Capital Stock represents a portion of the consideration for such exercise;
(13) payment of dividends, other distributions or other amounts by the Company to Holdings in amounts required for Holdings to pay franchise taxes and other fees required to maintain its existence and provide for all other operating costs of Holdings, including, without limitation, in respect of director fees and expenses, administrative, legal and accounting services provided by third parties and other costs and expenses, including all costs and expenses with respect to filings with the Commission, of up to $2.5 million per fiscal year;
(14) the acquisition of any shares of Disqualified Capital Stock of the Company either (a) solely in exchange for shares of Disqualified Capital Stock of the Company or Capital Stock of Holdings or (b) through the application of the net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Disqualified Capital Stock of the Company or, to the extent the proceeds therefrom are contributed by Holdings to the Company, whose determination from shares of Capital Stock of Holdings;
(15) any purchase or redemption of Indebtedness that ranks junior to the Securities utilizing any Net Cash Proceeds remaining after the Company has complied with the requirements of the covenants described under Sections 4.17 and 4.18;
(16) the payment of dividends, other distributions or amounts by the Company to Holdings in amounts required to pay the tax obligations of the Company and its Subsidiaries and the tax obligations of Holdings or any of its direct or indirect parent attributable to the Company and its Subsidiaries; provided that (x) the amount of dividends paid pursuant to -------- this clause (16) to enable Holdings or any of its direct or indirect parents to pay Federal and state income taxes at any time shall not exceed the amount of such Federal and state income taxes actually owing by Holdings or any of its direct or indirect parents at such time for the respective period and (y) any refunds received by Holdings or any of its direct or indirect parents attributable to the Company and its Subsidiaries shall promptly be returned by Holdings or any of its direct or indirect parents to the Company; and
(17) if no Default or Event of Default shall have occurred and be continuing, payments of cash, or dividends, distributions or advances to Holdings to allow Holdings to make payments of cash, in lieu of the issuance of fractional shares upon the exercise of warrants or upon the conversion or exchange of, or issuance of Capital Stock in lieu of cash dividends on, any Capital Stock of Holdings, the Company or any Restricted Subsidiary, which in the aggregate do not exceed $3.0 million. In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date in accordance with clause (c) of the immediately preceding paragraph, amounts expended pursuant to clauses (1), (2), (4), (5), (6), (7), (8), (9), (15) and (17) shall be evidenced by a Board Resolutionincluded in such calculation. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2)Payment, (3), (4), (6), (7) or (8)) the Company will shall deliver to the Trustee an Officers’ ' Certificate stating that such Restricted Payment is permitted complies with this Indenture and setting forth in reasonable detail the basis upon which the required calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in which calculations may be based upon the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Company's latest available internal quarterly financial statements.
Appears in 1 contract
Sources: Indenture (GSL Corp)
Limitation on Restricted Payments. The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) Qualified Capital Stock of the Company or and dividends and distributions payable to the Company or a another Restricted Subsidiary of the Company)) on or in respect of shares of Capital Stock of the Company or its Restricted Subsidiaries to holders of such Capital Stock;
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or its Restricted Subsidiaries or any direct warrants, rights or indirect parent options to purchase or acquire shares of the Companyany class of such Capital Stock;
(3) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value value, prior to any scheduled final maturity, scheduled repayment or scheduled sinking fund payment, any Indebtedness of the Company or any Guarantor that is subordinated subordinate or junior in right of payment to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionGuarantee; or
(4) make any Restricted Investment (all such payments and other than Permitted Investments); (each of the foregoing actions set forth in these clauses (1), (2), (3) through and (4) above being collectively referred to as a “Restricted PaymentsPayment”), unless, ; if at the time of and such Restricted Payment or immediately after giving effect thereto,
(i) a Default or an Event of Default shall have occurred and be continuing; or
(ii) the Company is not able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.12; or
(iii) the aggregate amount of Restricted Payments (including such proposed Restricted Payment) made subsequent to the Issue Date (the amount expended for such purposes, if other than in cash, being the Fair Market Value of such property at the time of the making thereof) shall exceed the sum of:
(A) 50% of the cumulative Consolidated Net Income (or if cumulative Consolidated Net Income is a loss, minus 100% of such loss) of the Company earned during the period beginning on the first day of the first fiscal quarter after the Issue Date and ending on the last day of the Company’s most recent fiscal quarter ending prior to the date the Restricted Payment occurs for which financial statements are available (the “Reference Date”) (treating such period as a single accounting period); plus
(B) 100% of the aggregate net cash proceeds received by the Company from any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to the Issue Date and on or prior to the Reference Date of Qualified Capital Stock of the Company (excluding any net proceeds from an Equity Offering to the extent used to redeem Notes pursuant to paragraph 5(b) of the Notes); plus
(C) without duplication of any amounts included in clause (iii)(B) above, 100% of the aggregate net cash proceeds of any equity contribution received by the Company from a holder of the Company’s Capital Stock subsequent to the Issue Date and on or prior to the Reference Date (excluding any net proceeds from any such capital contribution to the extent used to redeem Notes pursuant to paragraph 5(b) of the Notes); plus
(D) 100% of the aggregate net cash proceeds received from the issuance of Indebtedness or shares of Disqualified Capital Stock of the Company that have been converted into or exchanged for Qualified Capital Stock of the Company subsequent to the Issue Date and on or prior to the Reference Date. In the case of clauses (iii)(B) and (C) above, any net cash proceeds from issuances and sales of Qualified Capital Stock of the Company financed directly or indirectly using funds borrowed from the Company or any Subsidiary of the Company, shall be excluded until and to the extent such borrowing is repaid. Notwithstanding the foregoing, the provisions set forth in the immediately preceding paragraph do not prohibit:
(1) the payment of any dividend or other distribution or redemption within 60 days after the date of declaration of such dividend or call for redemption if such payment would have been permitted on the date of declaration or call for redemption;
(2) the acquisition of any shares of Qualified Capital Stock of the Company, either (i) solely in exchange for other shares of Qualified Capital Stock of the Company or (ii) through the application of net proceeds of a sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company within 60 days after such sale;
(3) the acquisition of any Indebtedness of the Company or the Guarantors that is subordinate or junior in right of payment to the Notes and Guarantees either (i) solely in exchange for shares of Qualified Capital Stock of the Company, or (ii) through the application of net proceeds of a sale for cash (other than to a Subsidiary of the Company) within 60 days after such sale of (a) shares of Qualified Capital Stock of the Company or (b) if no Default or Event of Default would exist after giving effect thereto, Refinancing Indebtedness;
(4) an Investment either (i) solely in exchange for shares of Qualified Capital Stock of the Company or (ii) through the application of the net proceeds of a sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company within 60 days after such sale;
(5) if no Default or Event of Default has occurred and is continuing or would occur as a consequence exist after giving effect thereto, the repurchase or other acquisition of shares of Capital Stock of the Company from employees, former employees, directors or former directors of the Company (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the terms of the agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors of the Company under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such Capital Stock; provided, however, that the aggregate amount of such repurchases and other acquisitions in any calendar year shall not exceed the sum of (x) $500,000 and (y) the aggregate amount of Restricted PaymentPayments permitted (but not made) pursuant to this clause (5) in prior calendar years; provided further, however, that such amount in any calendar year may be increased by an amount not to exceed the net cash proceeds of key man life insurance policies received by the Company after the Issue Date;
(26) the Company wouldESOP Stock Repurchases if, at the time of such Restricted Payment and after giving pro forma effect thereto as if to such Restricted Payment had been made at ESOP Stock Repurchase and any Indebtedness incurred to effect such ESOP Stock Repurchase, the beginning Consolidated Leverage Ratio of the applicable four-quarter periodCompany would be less than 4.5 to 1.0; provided, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Paymenthowever, together with that the aggregate amount number of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50ESOP Shares repurchased in any fiscal year shall not exceed 5% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary total ESOP Shares outstanding as of the date of such redesignation or (ii) such fair market value as last day of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The immediately preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercisefiscal year;
(7) ESOP Stock Repurchases not otherwise permitted by this covenant to the extent required by law; provided, however, that any payments made pursuant to this clause (7) that in the aggregate exceed $2.5 million shall be a Default; provided further, however, that such Default may be cured by the sale of Qualified Capital Stock, or an equity contribution received by the Company from a holder of the Company’s Capital Stock, for net cash proceeds in an amount equal to the Restricted Payment made pursuant to this clause (7) in excess of $2.5 million within 60 days of such ESOP Stock Repurchase;
(8) in the event of a Change of Control, and if no Default shall have occurred and be continuing or would exist after giving effect thereto, the payment, purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Indebtedness that is subordinated Indebtedness of to the Company Notes or any Restricted Subsidiary (a) the Guarantees, in each case, at a purchase price not greater than 101.0101% of the principal amount thereof of such Indebtedness (or, if such Indebtedness was issued with original issue discount, 101% of the accreted value), plus any accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10interest thereon; provided thatprovided, however, that prior to or simultaneously with such payment, purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the a Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes as a result of such Change of Control and has completed the repurchase or redemption of repurchased all Notes validly tendered for payment and not withdrawn in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), if no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount exist after giving effect thereto, the declaration or making of all a Restricted Payments (other than cash) will be Payment by the fair market value Company for the purpose of paying dividends on the date Common Stock of the Restricted Payment Company or any holding company of the asset(s) or securities proposed to be transferred or issued by Company following a Public Equity Offering of the Company or such Restricted Subsidiaryholding company resulting in gross proceeds of at least $30.0 million in an amount not to exceed 6% per annum of the net cash proceeds received by the Company (including any such net cash proceeds contributed by a holding company of the Company) from all Public Equity Offerings;
(10) repurchases of Capital Stock deemed to occur upon exercise of stock options, as warrants or other similar rights if such Capital Stock represents a portion of the case may beexercise price of such options, warrants or other similar rights;
(11) payments or distributions to dissenting stockholders of Capital Stock of the Company pursuant to applicable law, pursuant to or in connection with a consolidation, merger or transfer of assets that complies with the Restricted Payment. The fair market value provisions of any the Indenture applicable to mergers, consolidations and transfers of all or substantially all of the property and assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company andor any of its Restricted Subsidiaries;
(12) payments, advances or dividends to any direct or indirect parent entity of the Company to be used by such entity solely to pay its franchise and other taxes and reasonable directors’ fees and other fees and expenses owing by it in the case ordinary course of amounts of business in an aggregate amount not to exceed $50.0 million or more500,000 in any fiscal year, to the extent actually used by such entity to pay such taxes, fees and expenses;
(13) the Board of Directors application of the Companyproceeds from the issuance of the Notes on the Issue Date as described under “Use of Proceeds” in the Offering Circular;
(14) payments to any direct or indirect parent entity of the Company to be used by such entity solely to pay federal, whose determination state and local income taxes; provided, however, such payments shall be evidenced made no earlier than thirty days prior to the date on which such entity is required to make such payment and shall not exceed the aggregate tax liability of the Company and its Restricted Subsidiaries for such calendar year determined for this purpose as if the Company and its Restricted Subsidiaries were a separate affiliated group (as defined in Section 1504 of the Internal Revenue Code of 1986, as amended) filing a consolidated return, or, to the extent applicable, a separate group filing combined or unitary returns, and then only to the extent that any such payments are actually paid by such entity to governmental entities (after taking into account the tax attributes of members of any actual consolidated, combined or unitary returns that include the Company and any Restricted Subsidiaries and the application of refunds or credits of overpayments of Taxes made in previous calendar years); and
(15) if no Default shall have occurred and be continuing or would exist after giving effect thereto, other Restricted Payments not to exceed $5.0 million in the aggregate since the Issue Date. In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date in accordance with clause (iii) of the first paragraph of this Section 4.10, amounts expended pursuant to clauses (1), (2)(ii), 3(ii)(a), (4)(ii), (6), (7), (9) and (15) shall be included in such calculation. If the Company makes a Board ResolutionRestricted Payment that, at the time of the making of such Restricted Payment, would in the good faith determination of the Company be permitted under the requirements of this covenant, such Restricted Payment will be deemed to have been made in compliance with this covenant notwithstanding any subsequent adjustments made in good faith to the Company’s financial statements for any period which adjustments affect any of the financial data used to make the calculations with respect to such Restricted Payment. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2)Payment, (3), (4), (6), (7) or (8)) the Company will shall deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted complies with the Indenture and setting forth in reasonable detail the basis upon which the required calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in which calculations may be based upon the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Company’s latest available internal quarterly financial statements.
Appears in 1 contract
Sources: Indenture (BRPP LLC)
Limitation on Restricted Payments. The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
, (1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2a) purchase, redeem or otherwise acquire or retire for value (includingany Capital Stock of the Company, without limitationor any warrants, in connection with rights or options to acquire shares of any merger or consolidation to which class of such Capital Stock, other than through the Company is a party) any Equity Interests exchange therefor solely of Qualified Capital Stock of the Company or any direct warrants, rights or indirect parent options to acquire Qualified Capital Stock of the Company;
, (3b) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled final maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchase, redemption, defeasance or other acquisition of any such Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance Company or other acquisition; or
(4c) make any Restricted Investment (all such payments and other than Permitted Investments) in any Person (each of the foregoing prohibited actions set forth in these clauses (1a), (b) through and (4c) above being collectively referred to as “a "Restricted Payments”Payment"), unless, if at the time of and such proposed Restricted Payment or immediately after giving effect to such Restricted Payment:
thereto, (1i) no a Default or an Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
result therefrom, or (2ii) the Company would, is not able to Incur at the time least $1.00 of such Restricted Payment and after giving pro forma effect thereto additional Indebtedness in accordance with paragraph (b) of Section 4.04 (as if such Restricted Payment had been made at the beginning as of the applicable four-quarter periodlast day of the Four Quarter Period), have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
or (3iii) such Restricted Payment, together with the aggregate amount of all other Restricted Payments (including such proposed Restricted Payment) made by subsequent to the Company and its Restricted Subsidiaries after May 11, 2004 Issue Date exceeds or would exceed the sum of: (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(au) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, or if such Consolidated Net Income for such period is shall be a deficitloss, less minus 100% of such deficit), plus
(bloss) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company Notwithstanding the foregoing, these provisions do not prohibit: (other than Disqualified Stock)1) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale acquisition of Equity Interests Capital Stock of the Company (other than Disqualified Stock) or from the issue warrants, rights or sale of convertible or exchangeable Disqualified options to acquire Capital Stock or convertible or exchangeable debt securities of the Company that have been converted into either (i) solely in exchange for shares of Qualified Capital Stock of the Company or exchanged for such Equity Interests (other than Equity Interests (warrants, rights or Disqualified options to acquire Qualified Capital Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as through the application of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of, Equity Interests of shares of Qualified Capital Stock of the Company or warrants, rights or options to acquire Qualified Capital Stock of the Company; (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or 2) the acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Subordinated Indebtedness of the Company or any Guarantor with either (i) solely in exchange for shares of Qualified Capital Stock of the net cash proceeds from an incurrence ofCompany, or in exchange for, Permitted Refinancing Indebtedness;
(4ii) through the payment application of any dividend or distribution by net proceeds of a Restricted substantially concurrent sale for cash (other than to a Subsidiary of the Company to the holders Company) of its Equity Interests on a pro rata basis;
(5A) the repurchase, redemption or other acquisition or retirement for value shares of any Equity Interests Qualified Capital Stock of the Company or any Restricted Subsidiary of the Company held by any current warrants, rights or former director, officer, employee or consultant options to acquire Qualified Capital Stock of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement (B) Permitted Refinancing Indebtedness; or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(63) the acquisition of Equity Interests loans by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) to employees in the event ordinary course of a Change of Control in accordance with provisions similar business up to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed of $25.0 million100,000 at any one time outstanding; provided, however, that at in the time ofcase of clauses (1), (2) and after giving effect to, any Restricted Payment permitted under the preceding clause (9)3) of this paragraph, no Default or Event of Default shall have occurred and be continuing at the time of such payment or would be caused therebyas a result thereof. The In determining the aggregate amount of all Restricted Payments made subsequent to the Issue Date, amounts expended pursuant to clauses (1)(ii), (2)(i) and (2)(ii)(A) shall, in each case, be included in such calculation. For purposes of the foregoing provisions, the amount of any Restricted Payment (other than cash) will shall be the fair market value (evidenced by a resolution of the Board of Directors set forth in an Officers' Certificate delivered to the Trustee) on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2)Payment, (3), (4), (6), (7) or (8)) the Company will shall deliver to the Trustee an Officers’ ' Certificate stating that such Restricted Payment is permitted complies with this Indenture and setting forth in reasonable detail the basis upon which the required calculations required were The Board of Directors may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if such designation would be permitted by the provisions of this Section 4.07 were computed4.03 and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. For purposes of determining compliance with this Section 4.07making such determination, all outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid in cash prior to such designation) in the event that a Restricted Payment meets the criteria of more than one of the categories of Subsidiary so designated will be deemed to be Restricted Payments described in at the preceding clauses time of such designation and will reduce the amount available for Restricted Payments under clause (1iii) through (9), or is entitled to be made pursuant to of the first paragraph of this Section 4.07, the Company 4.03. All such outstanding Investments will be permitted deemed to divide or classify (or later divided or classify or reclassify constitute Investments in whole or in part in its sole discretion) an amount equal to the fair market value of such Investments at the time of such designation. For purposes of this Section 4.03, if a particular Restricted Payment involves a non-cash payment, including a distribution of assets, then such Restricted Payment in any manner that complies with this Section 4.07shall be deemed to be an amount equal to the cash portion of such Restricted Payment, if any, plus an amount equal to the fair market value of the non-cash portion of such Restricted Payment.
Appears in 1 contract
Sources: Indenture (Packaged Ice Inc)
Limitation on Restricted Payments. The Company will notshall not make, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, make, any Restricted Payment, unless:
(1a) declare no Default or pay any dividend or make any other payment or distribution on account Event of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments Default shall have occurred and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, be continuing at the time of and or immediately after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2b) the Company would, at the time of such Restricted Payment and immediately after giving pro forma effect thereto as if to such Restricted Payment had been made at Payment, the beginning of the applicable four-quarter period, have been permitted to Company could incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of (other than Permitted Indebtedness) under Section 4.094.06; and
(3c) immediately after giving effect to such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made by after the Company and its Restricted Subsidiaries after May 11, 2004 Issue Date does not exceed the sum of (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a1) 50% of the Company's cumulative Consolidated Net Income after the Issue Date (or minus 100% of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such any cumulative deficit in Consolidated Net Income for during such period is a deficit, less 100% of such deficitperiod), plus
(b2) 100% of the aggregate net cash proceeds received by the Company (including Net Proceeds and the fair market value of any Additional Assets securities or other property received by the Company as a capital contribution to the extent acquired in consideration of Equity Interests common equity of the Company after the Issue Date and from the issue or sale, after the Issue Date, of Capital Stock (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital Capital Stock or from the issue or sale of Equity Interests Capital Stock of the Company issued to any Subsidiary of the Company) of the Company or any Indebtedness or other securities of the Company convertible into or exercisable or exchangeable for Capital Stock (other than Disqualified Capital Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have which has been so converted into or exchanged for such Equity Interests exercised or exchanged, as the case may be and (other than Equity Interests (or Disqualified Stock or debt securities3) sold to a Subsidiary $350,000. For purposes of the Company), plus
determining under this clause (c) to the extent that any amount expended for Restricted Investment that was made after May 11Payments, 2004 is sold for cash or otherwise liquidated or repaid for cash, distributed shall be valued at the lesser face amount thereof and property other than cash shall be valued at its fair market value. The provisions of this covenant shall not prohibit (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may bethereof, if the dividend, distribution or redemption payment on the at such date of declaration or the date of the notice of redemption, as the case may be, such payment would have complied comply with the provisions of the this Indenture;
, (2ii) the redemption, repurchase, retirement, defeasance or other acquisition retirement of any subordinated Indebtedness shares of Capital Stock of the Company or any Guarantor subordinated Indebtedness by conversion into, or of any Equity Interests of the Company by or in exchange for, shares of Capital Stock (other than Disqualified Capital Stock), or out of of, the net cash proceeds Net Proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of other shares of Capital Stock of the Company (other than Disqualified Capital Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3iii) the defeasance, redemption, repurchase, redemption or retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with subordinated to the net cash proceeds from an incurrence of, or Notes in exchange for, Permitted Refinancing Indebtedness;
by conversion into, or out of the Net Proceeds of, a substantially concurrent sale or incurrence of Indebtedness (4other than any Indebtedness owed to a Subsidiary) of the Company that is contractually subordinated in right of payment to the Notes to at least the same extent as the Subordinated Indebtedness being redeemed or retired, (iv) the payment retirement of any dividend shares of Disqualified Capital Stock by conversion into, or distribution by exchange for, shares of Disqualified Capital Stock, or out of the Net Proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary of the Company to the holders Company) of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Disqualified Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
Stock, (9v) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), so long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount continuing, the payment of all Restricted Payments (other than cash) will be the fair market value cash dividends on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or Series A Preferred Stock when such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that dividends are required to be valued by this covenant will paid in cash in accordance with the Restated Articles, (vi) payment, from the net proceeds of the Offerings, of up to $2,250,000 to Parent to be determinedused to repurchase from the High Voltage Engineering Corporation Retirement Plan shares of the common stock of Parent within 60 days of the Issue Date for not more than $2,250,000, and fund a proportional accrual relating to the Subordinated Notes Warrants of up to $150,000, (vii) so long as no Default or Event of Default shall have occurred and be continuing, the exchange of Warrants for Subsidiary Warrants or Common Shares for Subsidiary Shares in the case event of a Qualified Subsidiary IPO, (viii) payments required to effect the reclassification of an Unrestricted Subsidiary as a Restricted Subsidiary in compliance Section 4.22, (ix) the payment of management fees for services provided by Parent or its employees in an aggregate annual amount not to exceed $750,000 and (x) payment for the ▇▇▇▇▇▇ Notes; PROVIDED, HOWEVER, that any amounts under $50.0 million, paid by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment pursuant to clauses (excluding any Restricted Payment described in the preceding clause (2i), (3v), (4vi), (6), vii) and (7x) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.shall reduce amounts otherwise available for Restricted
Appears in 1 contract
Sources: Second Supplemental Indenture (High Voltage Engineering Corp)
Limitation on Restricted Payments. (A) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which involving the Company or any of its Restricted Subsidiaries is a partySubsidiaries) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or dividends or distributions payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which involving the Company is a partyCompany) any Equity Interests of the Company or any Subsidiary of the Company (other than a Wholly Owned Restricted Subsidiary of the Company) or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the any Subsidiary Guarantees prior to any scheduled repayment or scheduled maturityGuarantee, except a payment, purchase, redemption, defeasance payment of interest or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or at the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1Section 4.10(A)(1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has shall have occurred and is be continuing or would occur as a consequence of such Restricted Paymentthereof;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May June 11, 2004 2003 (excluding Restricted Payments permitted by clauses (2Section 4.10(B)(2), (3), (4), (6), (7) and (8) of 5)) (the next succeeding paragraph“Basket”), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1the beginning of the first fiscal quarter commencing after June 11, 2004 2003 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), ; plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May June 11, 2004 2003 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company (other than Subordinated Obligations) that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), ; plus
(c) to the extent that any Restricted Investment that was made after May June 11, 2004 2003 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, ; plus
(d) to the extent that any upon a redesignation of an Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004Subsidiary, the lesser of (i) the fair market value of the Company’s Investment proportionate interest in such Subsidiary as of the date of immediately following such redesignation or redesignation, and (ii) such fair market value as the aggregate amount of the date on which Company’s Investments in such Subsidiary was originally designated to the extent such Investments reduced the Basket and were not previously repaid or otherwise reduced.
(B) So long as an Unrestricted Subsidiary. The no Default has occurred and is continuing or would be caused thereby, the preceding provisions will shall not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may bethereof, if the dividend, distribution or redemption payment on the at said date of declaration or the date of the notice of redemption, as the case may be, such payment would have complied with the provisions of the this Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Subsidiary Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will shall be excluded from clause (3)(b) of the preceding paragraphSection 4.10(A)(3)(b);
(3) the defeasance, redemption, repurchase, retirement repurchase or other acquisition of subordinated Indebtedness Subordinated Obligations of the Company or any Subsidiary Guarantor with the net cash proceeds from an incurrence of, or in exchange for, of Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its common Equity Interests on a pro rata basis;
(5) Investments acquired as a capital contribution to, or in exchange for, or out of the repurchasenet cash proceeds of a substantially concurrent offering of, redemption Capital Stock (other than Disqualified Stock) of the Company; provided that the amount of any such net cash proceeds that are utilized for any such acquisition or exchange shall be excluded from Section 4.10(A)(3)(b);
(6) the repurchase of Capital Stock deemed to occur upon the exercise of options or warrants if such Capital Stock represents all or a portion of the exercise price thereof;
(7) the redemption, repurchase or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current officers, directors or employees or former directorofficers, officerdirectors or employees (or their transferees, employee estates or consultant beneficiaries under their estates), either (x) upon any such individual’s death, disability, retirement, severance or termination of the Company employment or any of its Restricted Subsidiaries service or (y) pursuant to any equity subscription agreement or planagreement, stock option agreement, stockholders’ agreement or similar agreement or planagreement; provided provided, in any case, that the aggregate price cash consideration paid for all such repurchasedredemptions, redeemed, acquired repurchases or retired Equity Interests may other acquisitions or retirements shall not exceed (A) $2.0 5.0 million during any calendar year (with unused amounts in any twelve-month period;
calendar year being carried forward to the next succeeding calendar year) plus (6B) the acquisition amount of any net cash proceeds received by or contributed to the Company from the issuance and sale after the Issue Date of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7other than Disqualified Stock) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company to its officers, directors or any Restricted Subsidiary (a) at a purchase price employees that have not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect been applied to the Notes and has completed payment of Restricted Payments pursuant to this Section 4.10(B)(7), plus (C) the repurchase or redemption net cash proceeds of all Notes validly tendered for any “key-man” life insurance policies that have not been applied to the payment in connection with such Change of Control Offer or Asset Sale OfferRestricted Payments pursuant to this Section 4.10(B)(7);
(8) the payment of cash in lieu of fractional shares of Capital Stock Equity Interests;
(9) payments or distributions to dissenting stockholders pursuant to applicable law in connection with any transaction otherwise permitted under this a merger, consolidation or transfer of assets that complies with Section 4.075.01;
(10) dividends paid on shares of Disqualified Stock of the Company issued in accordance with Section 4.09; or
(911) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 50.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued to or by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will Section 4.10 shall be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, determined by the Board of Directors of the CompanyDirectors, whose determination resolution with respect thereto shall be evidenced delivered to the Trustee. The Board of Directors’ determination must be based upon an opinion or appraisal issued by a Board Resolutionan independent accounting, appraisal or investment banking firm of national standing if the fair market value exceeds $20.0 million. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2)Payment, (3), (4), (6), (7) or (8)) the Company will shall deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 4.10 were computed. For purposes , together with a copy of determining compliance with any fairness opinion or appraisal required by this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Indenture.
Appears in 1 contract
Limitation on Restricted Payments. The Company will not, and will not cause or permit any of its the Restricted Subsidiaries to, directly or indirectly:
(1a) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests Qualified Capital Stock of the Company) on or in respect of shares of its Capital Stock to holders of such Capital Stock (other than Disqualified Stockincluding by means of a Person (including an Unrestricted Subsidiary) making such a payment with the proceeds of an Investment made by the Company or payable to the Company or a any Restricted Subsidiary of the CompanySubsidiary);
(2b) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct warrants, rights or indirect parent options to purchase or acquire shares -55- of any class of such Capital Stock (including by means of a Person (including an Unrestricted Subsidiary) making such a payment with the Companyproceeds of an Investment made by the Company or any Restricted Subsidiary);
(3c) make any principal payment on or with respect toon, or purchase, redeem, defease defease, retire or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled repayment principal payment, sinking fund or scheduled maturity, except a paymentany Subordinated Indebtedness (other than the principal payment on, or the purchase, redemption, defeasance defeasance, retirement or other acquisition for value of, Subordinated Indebtedness made in satisfaction of any such Indebtedness in or anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due final maturity within one year of the due date of such paymentobligation, purchase, redemption, defeasance installment or other acquisitionfinal maturity); or
(4d) make any Restricted Investment (all such payments and other than Permitted Investments); (each of the foregoing actions set forth in these clauses (1a), (b), (c) through and (4d) above being collectively referred to as “a "Restricted Payments”Payment"), unless, if at the time of and such Restricted Payment or immediately after giving effect to such Restricted Paymentthereto:
(1) no a Default or an Event of Default has shall have occurred and is continuing or would occur as a consequence of such Restricted Paymentbe continuing;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted is not able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)Permitted Indebtedness) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital in compliance with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such saleSection 4.03; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;or
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (including such proposed Restricted Payment) made after March 31, 2003 (the amount expended for such purpose, if other than in cash) will be , being the fair market value on the date Fair Market Value of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, property as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, determined reasonably and in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, good faith by the Board of Directors of the Company, whose determination ) shall be evidenced by a Board Resolution. Not later than exceed the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.sum of:
Appears in 1 contract
Sources: Indenture (Tenneco Automotive Inc)
Limitation on Restricted Payments. (a) The Company will not, and will not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly:
, (1i) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any in respect of its Restricted Subsidiaries’ Equity Interests Capital Stock (including, without limitation, including any payment in connection with any merger or consolidation to which involving the Company or any of its Restricted Subsidiaries is a partyCompany) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests Capital Stock in their capacity capacities as such (other than except dividends or distributions payable solely in Equity Interests Capital Stock (other than Disqualified Stock) of the Company or in options, warrants or other rights to purchase its Capital Stock (other than Disqualified Stock) and except dividends or distributions payable to the Company or a Restricted Subsidiary of (and, if the CompanyRestricted Subsidiary making such dividends or distributions has any stockholders other than the Company or another Restricted Subsidiary, to such stockholders on no more than a pro rata basis, measured by value);
), (2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent Capital Stock of the Company;
, any Restricted Subsidiary or any other Affiliate of the Company, (3iii) make any principal payment on or with respect topurchase, or purchaserepurchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled maturity, scheduled repayment or scheduled maturity, except a sinking fund payment, purchase, redemption, defeasance any Subordinated Obligations or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4iv) make any Restricted Investment (all any such payments and dividend, distribution, purchase, redemption, repurchase, defeasance, other actions set forth in these clauses acquisition, retirement or Restricted Investment being herein referred to as a "Restricted Payment") if at the time the Company or such Restricted Subsidiary makes such Restricted Payment: (1) through a Default shall have occurred and be continuing (4or would result therefrom); or (2) above being collectively referred the Company would not be permitted to as “Restricted Payments”), unless, at the time issue an additional $1.00 of and Indebtedness pursuant to paragraph (a) under Section 4.13 after giving pro forma effect to such Restricted Payment:
; or (1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(23) the Company would, at the time aggregate amount of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by since March 31, 1998 would exceed the Company and its Restricted Subsidiaries after May 11, 2004 sum of: (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(aA) 50% of the Consolidated Net Income of the Company for accrued during the period (taken treated as one accounting period) from April 1the beginning of the first full fiscal quarter commencing after March 31, 2004 1998 to the end of the Company’s most recently ended recent fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if in case such Consolidated Net Income for such period is shall be a deficit, less minus 100% of such deficit), plus
) plus (bB) 100% of the aggregate net cash proceeds Net Cash Proceeds received by the Company from (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)x) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company its Capital Stock (other than Disqualified Stock) subsequent to March 31, 1998 (other than an issuance or from sale to a Subsidiary or an employee stock ownership plan or similar trust in the benefit of employees) and (y) the issue or sale (other than an issuance or sale to a Subsidiary or an employee stock ownership plan or similar trust in the benefit of convertible or exchangeable employees) after March 31, 1998 of Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged in accordance with their terms for such Equity Interests (other than Equity Interests (or Disqualified Capital Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if in each case to the extent such redemptionproceeds are not used to redeem, repurchase, retirement, defeasance retire or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company otherwise acquire Capital Stock or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary or to make any Investment pursuant to clause (viii) of the definition of "Permitted Investment."
(b) The provisions of clauses (2) and (3) of paragraph (a) at a shall not prohibit: (1) any purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
or Subordinated Obligations of the Company made by exchange for, or out of the proceeds of the substantially concurrent sale or issuance of, Capital Stock of the Company (9) other Restricted Payments in than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary or an aggregate amount since May 11, 2004 not to exceed $25.0 millionemployee stock ownership plan); provided, however, that the Net Cash Proceeds from such sale shall be excluded from clause (3)(B) of paragraph (a) above; (2) dividends paid within 60 days after the date of declaration if at such date of declaration such dividend would have complied with this provision; provided, however, that such dividend shall be deducted in the time calculation of the amount of Restricted Payments available to be made referred to in clause (3) of paragraph (a) above; (3) the repurchase of shares of, and after giving effect toor options to purchase shares of, Capital Stock of the Company or any Restricted Payment of its Subsidiaries from employees, former employees, directors or former directors of the Company or any of its Subsidiaries (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the terms of the agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors under which such individuals purchase or sell or are granted the preceding option to purchase or sell, shares of such common stock; provided, however, that the aggregate amount of any repurchases pursuant to this clause (9), 3) and any purchases pursuant to clause (4) below shall not exceed $5,000,000 per year; (4) provided that no Default or Event of Default shall have occurred and or be continuing at the time of such payment or would be caused thereby. The amount of all Restricted Payments (other than cash) will be after giving effect thereto, the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued purchase by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The of shares of its common stock (for not more than fair market value value) in connection with the delivery of such stock to grantees under any assets stock option plan (upon the exercise by such grantees of their stock options) or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer any other deferred compensation plan of the Company and, in the case of amounts of $50.0 million or more, approved by the Board of Directors Directors; provided, however, that the aggregate amount of any purchases pursuant to this clause (4) and any repurchases pursuant to clause (3) above shall not exceed $5,000,000 per year; (5) the redemption, purchase, retirement or other payoff of any Subordinated Obligations with the proceeds of any Refinancing Indebtedness permitted to be incurred pursuant to the terms of clauses (b)(v) and (v), respectively, of Section 4.13 and Section 4.18; and (6) provided that no Default or Event of Default shall have occurred or be continuing at the time of such payment or after giving effect thereto, other Restricted Payments in an aggregate amount not to exceed $10 million; provided, however, that such payment shall be deducted in the calculation of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories amount of Restricted Payments described in the preceding clauses (1) through (9), or is entitled available to be made pursuant referred to the first in clause (3) of paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretiona) such Restricted Payment in any manner that complies with this Section 4.07above.
Appears in 1 contract
Sources: Indenture (Amida Industries Inc)
Limitation on Restricted Payments. The Company will (i) may not, and will may not permit any Subsidiary of its Restricted Subsidiaries the Company to, directly or indirectly:
(1) , declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, including any payment in connection with any merger or consolidation to which derived from assets of the Company or any Subsidiary) in respect of its Restricted Subsidiaries is a party) Capital Stock or to the direct holders thereof, excluding (a) any dividends or indirect holders of distributions by the Company’s or any Company payable solely in shares of its Restricted Subsidiaries’ Equity Interests in their capacity as such Common Stock (other than Redeemable Stock) or in options, warrants or other rights to acquire its Common Stock (other than Redeemable Stock), and (b) in the case of a Subsidiary, dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to 1)to the Company or a Restricted Subsidiary and(2) to minority shareholders of such Subsidiary, provided that at least a pro rata amount is paid to the Company);
Company and/or a Subsidiary, as the case may be, and (2ii) may not, and may not permit any Subsidiary to, directly or indirectly, purchase, redeem redeem, or otherwise acquire or retire for value (including, without limitation, in connection with a) any merger or consolidation to which Capital Stock of the Company is a partyor (b) any Equity Interests options, warrants or other rights to acquire shares of Capital Stock of the Company or any direct securities convertible or indirect parent exchangeable into shares of Capital Stock of the Company;
Company (3other than the Convertible Subordinated Notes) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except (each of clauses (i) and (ii) being a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4"Restricted Payment") make any Restricted Investment (all such payments and other actions set forth in these clauses if: (1) through an Event of Default, or an event that with the passing of time or the giving of notice, or both, would constitute an Event of Default, shall have occurred and be continuing or would result from such Restricted Payment, or (42) above being collectively referred to as “Restricted Payments”), unless, at the time of and after upon giving effect to such Restricted Payment:
(1) no Default or Event , the aggregate of Default has occurred and is continuing or would occur as a consequence all Restricted Payments from the date of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning original issuance of the applicable four-quarter period, have been permitted to incur at least $1.00 Securities exceeds the sum of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 5075% of the cumulative Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such in the case Consolidated Net Income for such period is a deficitshall be negative, less 100% of such deficit) of the Company from the date of original issuance of the Securities through the last day of the last full fiscal quarter ending immediately preceding such Restricted Payment for which quarterly or annual financial statements are available (taken as a single accounting period), plus
; plus (b) 100% of the aggregate net cash proceeds received by the Company after the date of original issuance of the Securities, from contributions of capital or the issuance and sale (including other than to a Subsidiary) of Capital Stock (other than Redeemable Stock) of the fair market value of any Additional Assets Company, options, warrants or other rights to the extent acquired in consideration of Equity Interests acquire Capital Stock (other than Redeemable Stock) of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities and indebtedness of the Company that have has been converted into or exchanged for such Equity Interests Capital Stock (other than Equity Interests (Redeemable Stock and other than by or Disqualified Stock or debt securitiesfrom a Subsidiary) sold to a Subsidiary of the Company), plus
(c) Company after the date of original issuance of the Securities. Prior to the extent that making of any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cashPayment, the lesser Company shall deliver to the Trustee an Officers' Certificate setting forth the computations by which the determinations required by clause (2) above were made and stating that no Event of Default, or event that with the passing of time or the giving of notice, or both, would constitute an Event of Default, has occurred and is continuing or will result from such Restricted Payment. Notwithstanding the foregoing, so long as no Event of Default, or event that with the passing of time or the giving of notice, or both, would constitute an Event of Default, shall have occurred and be continuing or would result therefrom, (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) Company and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date may pay any dividend on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment Capital Stock of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, class within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemptionthereof if, as the case may be, if the dividend, distribution or redemption payment on the date of declaration when the dividend was declared, the Company or the date of the notice of redemption, as the case may be, would such Subsidiary could have complied paid such dividend in accordance with the provisions of the Indenture;
foregoing provisions; (2ii) the redemptionCompany may purchase, repurchaseredeem, retirement, defeasance acquire or other acquisition retire any shares of any subordinated Indebtedness Capital Stock of the Company or any Guarantor or of any Equity Interests of the Company solely in exchange for, for or out of the net cash proceeds of the substantially concurrent sale (other than from or to a Subsidiary or from or to an employee stock ownership plan financed by loans from the Company or a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cashRedeemable Stock) will be the fair market value on the date of the Company. Any payment made pursuant to clause (i) or (ii) of this paragraph shall be a Restricted Payment for purposes of the asset(s) or securities proposed to be transferred or issued by the Company or such calculating aggregate Restricted Subsidiary, as the case may be, Payments pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07paragraph.
Appears in 1 contract
Sources: Indenture (Philip Services Corp/De)
Limitation on Restricted Payments. The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
: (1a) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable made to the Company or a any Wholly-Owned Restricted Subsidiary of 47 56 the Company and other than any dividend or distribution payable solely in Qualified Capital Stock of the Company);
) on or in respect of its Capital Stock to holders of such Capital Stock; (2b) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct warrants, rights or indirect parent options to purchase or acquire such Capital Stock (other than the exchange of such Capital Stock or any warrants, rights or options to acquire Capital Stock of the Company for Qualified Capital Stock of the Company;
); (3c) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value value, prior to any scheduled final maturity, scheduled repayment or scheduled sinking fund payment, any Indebtedness of the Company or a Subsidiary Guarantor that is subordinated subordinate or junior in right of payment to the Notes or the such Subsidiary Guarantees prior to any scheduled repayment Guarantor's Guarantee; or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4d) make any Restricted Investment (all such payments and other than Permitted Investments) (each of the foregoing actions set forth in these clauses (1a), (b), (c) through and (4d) above being collectively referred to as “a "Restricted Payments”Payment"), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, if at the time of such Restricted Payment and or immediately after giving pro forma effect thereto as if such Restricted Payment had been made at thereto, (i) a Default or an Event of Default shall have occurred and be continuing, or (ii) the beginning of the applicable four-quarter period, have been permitted Company is not able to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth (other than Permitted Indebtedness) in the first paragraph of compliance with Section 4.09; and
4.12, or (3iii) such Restricted Payment, together with the aggregate amount of all other Restricted Payments (including such proposed Restricted Payment) made by subsequent to the Company and its Restricted Subsidiaries after May 11Issue Date (the amount expended for such purposes, 2004 if other than in cash, being the Fair Market Value of such property) shall exceed the sum of: (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(av) 50% of the cumulative Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, or if such cumulative Consolidated Net Income for such period is shall be a deficitloss, less minus 100% of such deficitloss) of the Company earned during the period beginning on the first day of the fiscal quarter including the Issue Date and ending on the last day of the fiscal quarter ending at least 30 days prior to the date the Restricted Payment occurs (the "Reference Date") (treating such period as a single accounting period); plus (w) 100% of the aggregate net proceeds (including the Fair Market Value of any business or property other than cash) received by the Company from any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to the Issue Date of Qualified Capital Stock of the Company, plus
including treasury stock; plus (bx) without duplication of any amounts included in clause (iii) (w) above, 100% of the aggregate net cash proceeds of any equity contribution received by the Company from a holder of the Company's Capital Stock (including excluding, in the fair market value case of clauses (iii) (w) and (x), any Additional Assets net cash proceeds from a Public Equity Offering to the extent acquired in consideration used to redeem the Notes and any net cash proceeds received by the Company from the sale of Equity Interests Qualified Capital Stock of the Company or equity contribution which has been financed, directly or indirectly, using funds (other than Disqualified Stock)1) since May 11, 2004 as a contribution to its common equity capital or borrowed from the issue Company or sale any of Equity Interests its Subsidiaries, unless and until and to the extent such borrowing is repaid or (2) contributed, extended, guaranteed or advanced by the Company or by any of its Subsidiaries); plus (y) an amount equal to the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, interest payments, repayments of loans or advances, or other transfers of cash, in each case, to the Company or to any Restricted Subsidiary of the Company from Unrestricted Subsidiaries (other than Disqualified Stock) or from the issue or sale but without duplication of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for any such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary amount included in cumulative Consolidated Net Income of the Company), plus
or from redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries (c) in each case valued as provided in Section 4.17), not to exceed, in the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cashcase of an Unrestricted Subsidiary, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Investments previously made by the Company or any 48 57 Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated in such Unrestricted Subsidiary and which were treated as a Restricted Subsidiary after May 11, 2004, the lesser of Payment under this Indenture; plus (iz) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:$40.0 million.
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery giving of any irrevocable redemption notice of redemption, as the case may be, if the dividend, distribution dividend or redemption payment would have been permitted on the date of declaration or the date giving of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
irrevocable redemption notice; (2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be continuing, the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value acquisition of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors Capital Stock of the Company, whose determination either (i) solely in exchange for shares of Qualified Capital Stock of the Company or (ii) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company; (3) if no Default or Event of Default shall have occurred and be continuing, the acquisition or repayment of any Indebtedness of the Company that is subordinate or junior in right of payment to the Notes either (i) solely in exchange for shares of Qualified Capital Stock of the Company, or (ii) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of (A) shares of Qualified Capital Stock of the Company or (B) Refinancing Indebtedness; (4) if no Default or Event of Default shall have occurred and be continuing, payments by the Company to repurchase Capital Stock or other securities of the Company from current or former directors, officers and other employees of the Company or any of its Subsidiaries; and (5) if no Default or Event of Default shall have occurred and be continuing, purchases of Capital Stock for use in connection with compensation arrangements of directors, officers and other employees of the Company and its Subsidiaries, provided that the aggregate amount of payments pursuant to clauses (4) and (5) shall not together exceed $5.0 million in any calendar year (net of the net cash proceeds received by the Company from the purchase by directors, officers and other employees of Capital Stock in connection with such compensation arrangements) plus any amount unused for the prior calendar year. In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date in accordance with clause (iii) of the immediately preceding paragraph, amounts expended pursuant to clauses (1), (2) (ii) and (3) (ii) (A) shall be evidenced by a Board Resolutionincluded in such calculation. Not later than the date of Within 30 days after making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2)Payment, (3), (4), (6), (7) or (8)) the Company will shall deliver to the Trustee an Officers’ ' Certificate stating that such Restricted Payment is permitted complies with this Indenture and setting forth in reasonable detail the basis upon which the required calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in which calculations may be based upon the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07Company's latest available internal quarterly financial statements.
Appears in 1 contract
Sources: Indenture (Sickinger Co)
Limitation on Restricted Payments. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly:
, (1i) declare or pay any dividend or make any other payment or distribution on account of the Company’s 's or any of its such Restricted Subsidiaries’ Subsidiary's Capital Stock or other Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Capital Stock or other Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of and other than dividends or distributions payable by a Restricted Subsidiary to another Restricted Subsidiary or to the Company);
; (2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger Capital Stock or consolidation to which the Company is a party) any other Equity Interests of the Company or any direct of its Restricted Subsidiaries (other than any such Equity Interest purchased from the Company or indirect parent any Restricted Subsidiary for fair market value (as determined by the Board of the Company;
Directors in good faith); (3iii) make voluntarily prepay Subordinated Indebtedness, whether any principal payment on or with respect tosuch Subordinated Indebtedness is outstanding on, or purchaseissued after, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionoriginal issuance of the Senior Notes except as specifically permitted by the covenants of this Indenture; or
(4iv) make any Restricted Investment (all such payments dividends, distributions, purchases, redemptions, acquisitions, retirements, prepayments and other actions set forth in these clauses (1) through (4) above Restricted Investments, being collectively referred to as “"Restricted Payments”"), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company wouldif, at the time of such Restricted Payment:
(A) a Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof, or
(B) immediately after such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at on a Pro Forma basis, the beginning of the applicable four-quarter period, have been permitted Company shall not be able to incur at least issue $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and4.07(a), or
(3C) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by after the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) date of original issuance of the next succeeding paragraph), is less than the sumSenior Notes, without duplication, of:
exceeds the sum of (a1) 50% of the aggregate Consolidated Net Income (including, for this purpose, gains from Asset Sales and, to the extent not included in Consolidated Net Income, any gain from a sale or disposition of a Restricted Investment) of the Company (or, in case such aggregate is a loss, 100% of such loss) for the period (taken as one accounting period) from April 1, 2004 to the end beginning of the first fiscal quarter commencing immediately after the date of original issuance of the Senior Notes and ended as of the Company’s 's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment Payment, plus (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b2) 100% of the aggregate net cash proceeds received by the Company (including and the fair market value of any Additional Assets to property or securities (as determined by the extent acquired Board of Directors in consideration of Equity Interests of good faith) received by the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Capital Stock or other Equity Interests of the Company subsequent to the date of original issuance of the Senior Notes (other than (x) Capital Stock or other Equity Interests issued or sold to a Restricted Subsidiary and (y) the issuance or sale of Disqualified Stock), plus (3) $5,000,000, plus (4) the amount by which the principal amount of and any accrued interest on either (x) Senior Indebtedness of the Company or (y) any Indebtedness of any Restricted Subsidiary is reduced on the Company's consolidated balance sheet upon the conversion or exchange other than by a Restricted Subsidiary subsequent to the date of original issuance of the Senior Notes of any Indebtedness of the Company or any Restricted Subsidiary (not held by the Company or any Restricted Subsidiary) for Capital Stock or other Equity Interests (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment Subsidiaries (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investmentany cash, plus
or the fair market value of any other property or securities (d) to as determined by the extent that any Unrestricted Subsidiary Board of Directors in good faith), distributed by the Company or any Restricted Subsidiary (to Persons other than the Company or any other Restricted Subsidiary) upon such conversion or exchange), plus (5) if any Non-Restricted Subsidiary is redesignated as a Restricted Subsidiary after May 11, 2004Subsidiary, the lesser of (i) the fair market value of the Company’s Investment deemed Restricted Payment resulting therefrom and determined in such accordance with the second sentence of Section 4.16; provided, however, that for purposes of this clause (5), the value of any redesignated Non-Restricted Subsidiary as of shall be reduced by the date of amount that any such redesignation replenishes or (ii) such fair market value as increases the amount of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:Restricted Investments permitted to be made pursuant to Section 4.05(b)(iii).
(1b) Notwithstanding Section 4.05(a), the following Restricted Payments may be made: (i) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may bethereof, if at said date of declaration such payment would comply with all the dividendprovisions hereof (including, distribution or redemption payment on but not limited to, this Section 4.05); (ii) making Restricted Investments at any time, and from time to time, in an aggregate outstanding amount of $20,000,000 after the date of declaration or original issuance of the Senior Notes (it being understood that if any Restricted Investment after the date of original issuance of the notice Senior Notes pursuant to this clause (ii) is sold, transferred or otherwise conveyed to any Person other than the Company or a Restricted Subsidiary, the portion of the net cash proceeds or fair market value of securities or properties paid or transferred to the Company and its Restricted Subsidiaries in connection with such sale, transfer or conveyance that relates or corresponds to the repayment or return of the original cost of such a Restricted Investment will replenish or increase the amount of Restricted Investments permitted to be made pursuant to this Section 4.05(b)(ii), so that up to $20,000,000 of Restricted Investments may be outstanding under this Section 4.05(b)(ii) at any given time; provided that any Restricted Investment in a Restricted Subsidiary made pursuant to this clause (ii) is made for fair market value (as determined by the Board of Directors in good faith); (iii) the repurchase, redemption, as retirement or acquisition of the Company's stock from the executives, management, employees or consultants of the Company or its Subsidiaries pursuant to the terms of any subscription, stockholder or other agreement or plan, up to an aggregate amount not to exceed $5,000,000; (iv) any loans, advances, distributions or payments from the Company to its Restricted Subsidiaries, or any loans, advances, distributions or payments by a Restricted Subsidiary to the Company or to another Restricted Subsidiary, in each case may bepursuant to intercompany Indebtedness, would have complied intercompany management agreements and other intercompany agreements and obligations; (v) investments in marketable securities and other negotiable instruments through the ▇▇▇▇▇▇▇ ▇▇▇▇ Funds (including the ▇▇▇▇▇▇▇ ▇▇▇▇ Interest Income Fund); (vi) the purchase, redemption, retirement or other acquisition of (A) any Senior Indebtedness of the Company or any Indebtedness of a Restricted Subsidiaries required by its terms to be purchased, redeemed, retired or acquired with the provisions net proceeds from asset sales (as defined in the instrument evidencing such Senior Indebtedness or Indebtedness) or upon a change of control (as defined in the instrument evidencing such Senior Indebtedness or Indebtedness) and (B) the Senior Notes pursuant to Sections 4.13 and 4.14; (vii) to the extent constituting Restricted Payments, payments under the Tax Sharing Agreement, New Subsidiary Consulting Agreement, Transition Agreement and the JI Properties Services Agreement; (viii) to the extent constituting Restricted Payments, payments under the New Subsidiary Advisory Agreement, provided that such payments will not be made and shall be accrued so long as any Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof, and the Company's obligations to pay such fees under the New Subsidiary Advisory Agreement shall be subordinated expressly to the Company's Obligations in respect of the Indenture;
Senior Notes and indemnities, expenses and other amounts under the New Subsidiary Advisory Agreement; (2ix) the redemption, repurchase, retirement, defeasance retirement or other the acquisition of any subordinated Indebtedness Capital Stock or other Equity Interests of the Company or any Guarantor or of any Equity Interests of the Company Restricted Subsidiary in exchange for, or out of the net cash proceeds of of, the substantially concurrent sale (other than to a Subsidiary of the Company) of, of other Capital Stock or other Equity Interests of the Company or any Restricted Subsidiary (other than any Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance retirement or other acquisition will acquisition, and any Net Income resulting therefrom, shall be excluded from clause this Section 4.05(a)(iv)(c)(1) and (3)(b) of the preceding paragraph;
c)(2); (3x) the defeasance, redemption, repurchase, retirement redemption or other acquisition repurchase of subordinated pari passu or Subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, issuance of permitted Refinancing Indebtedness or in exchange for, Permitted Refinancing Indebtedness;
the substantially concurrent sale (4) the payment of any dividend or distribution by other than to a Restricted Subsidiary of the Company to the holders Company) of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption Capital Stock or other acquisition or retirement for value of any Equity Interests of the Company or any of a Restricted Subsidiary (other than Disqualified Stock); provided that any net cash proceeds that are utilized for any such defeasance, redemption or repurchase, and any Net Income resulting therefrom, shall be excluded from this Section 4.05(a)(iv)(c)(1) and (c)(2); (xi) payments of fees, expenses and indemnities in respect of the Company held by any current or former directorCompany's and its Subsidiaries' directors and such payments to Parent (and its parent companies) in respect of their directors, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for amount of such fees payable to all such repurchased, redeemed, acquired or retired Equity Interests may directors does not exceed $2.0 million 250,000 in any twelve-month period;
fiscal year; (6xii) payments in respect of the acquisition of Equity Interests by the Company Junior Seller Notes, (xiii) payments in connection with the exercise Offering; (xiv) payments in respect of stock options the Contingent Earnout Agreement; (xv) Restricted Investments made or stock appreciation rights by way received in connection with the sale, transfer or disposition of cashless exercise;
(7) the purchaseany business, repurchase, redemption, defeasance properties or other acquisition or retirement for value of subordinated Indebtedness assets of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 Subsidiary, provided, that if such sale, transfer or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirementdisposition constitutes an Asset Sale, the Company has made the Change complies with Section 4.14; (xvi) any Restricted Investment constituting securities or instruments of Control Offer a Person issued in exchange for trade or Asset Sale Offer, as applicable, as provided in other claims against such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment Person in connection with a financial reorganization or restructuring of such Change of Control Offer or Asset Sale Offer;
Person; and (8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9xvii) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Investment constituting an equity investment in a Receivables Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.
Appears in 1 contract
Sources: Indenture (Motors & Gears Inc)
Limitation on Restricted Payments. The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, declare or make, or agree to make, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection Restricted Payment unless: (a) no Event of Default or event which, with any merger or consolidation to which the Company or any giving of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes notice or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition lapse of any such Indebtedness in anticipation time will become an Event of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments Default shall have occurred and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, be continuing at the time of and of, or after giving effect to such Restricted Payment:
; and (1b) no Default or Event of Default has occurred and is continuing or would occur as a consequence of immediately after giving effect to such Restricted Payment;
(2) , the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted would be able to incur Incur at least $US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)Permitted Indebtedness) since May 11pursuant to Section 10.10. Notwithstanding the preceding paragraph, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will this Section 10.11 does not prohibit:
(1i) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment dividend would have been permitted on the date of declaration or pursuant to the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenturepreceding paragraph;
(2ii) the redemptionany Restricted Payment, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company (a) in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests for Capital Stock of the Company (other than Disqualified Capital Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance ; or acquisition occurs not more than 120 days after such sale; provided that (b) through the amount application of any such the net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or received by the Company from a substantially concurrent sale of Capital Stock (other acquisition will be excluded from clause (3)(bthan Disqualified Capital Stock) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with a contribution to the net cash proceeds equity capital of the Company not representing an interest in Disqualified Capital Stock, in each case not received from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basisCompany;
(5iii) the repurchasevoluntary prepayment, purchase, defeasance, redemption or other acquisition or retirement for value of any Equity Interests Subordinated Indebtedness solely in exchange for, or through the application of the Company or any net cash proceeds of a substantially concurrent sale, other than to a Restricted Subsidiary of the Company held by any current or former directorCompany, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary of: (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cashDisqualified Capital Stock) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.; or
Appears in 1 contract
Limitation on Restricted Payments. (a) The Company will notshall not make, and will shall not permit any of its Restricted Subsidiaries toSubsidiary to make, directly or indirectly, any Restricted Payment if at the time of, and after giving effect to, such proposed Restricted Payment:
(1) declare a Default or pay Event of Default shall have occurred and be continuing;
(2) the Company could not incur at least $1.00 of additional Debt pursuant to clause (1) of Section 4.06(a); or
(3) the aggregate amount of such Restricted Payment and all other Restricted Payments declared or made since the Issue Date (the amount of any dividend or make any Restricted Payment, if made other payment or distribution on account than in cash, to be based upon Fair Market Value) would exceed the sum of
(A) 100% of the Company’s or any 's Cumulative Consolidated EBITDA minus 1.4 times the Company's Cumulative Consolidated Interest Expense, plus
(B) 100% of its Restricted Subsidiaries’ Equity Interests the aggregate net proceeds (includingafter deduction of fees, without limitationexpenses, any payment discounts and commissions incurred in connection with issuance and sale) and the Fair Market Value of securities or other Property received by the Company from the issue or sale, after the Issue Date, of Capital Stock (other than Disqualified Capital Stock of the Company or Capital Stock of the Company issued to any merger or consolidation to which Restricted Subsidiary of the Company) of the Company or any of its Restricted Subsidiaries is a party) Debt or to the direct or indirect holders other securities of the Company’s Company convertible into or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends exercisable or distributions payable in Equity Interests exchangeable for Capital Stock (other than Disqualified Capital Stock) of the Company which have been so converted or payable to exercised or exchanged, as the case may be, plus
(C) $10.0 million.
(b) Notwithstanding the foregoing limitation, the Company or a Restricted Subsidiary may:
(1) pay dividends on its Capital Stock within 60 days of the Company)declaration thereof if, on said declaration date, such dividends could have been paid in compliance with this Indenture; PROVIDED, HOWEVER, that such dividend shall be included in the calculation of the amount of Restricted Payments;
(2) purchase, redeem or otherwise repurchase, redeem, legally defease, acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a partyx) any Equity Interests Capital Stock of the Company or any direct Subordinated Obligations in exchange for, or indirect parent out of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year proceeds of the date of such paymentsubstantially concurrent sale of, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests Capital Stock of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (Capital Stock and other than Disqualified Stock) Capital Stock issued or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (iiy) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests Disqualified Capital Stock of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale of (other than to a Subsidiary of the Company) of, Equity Interests Disqualified Capital Stock of the Company that has a redemption date, and requires the payment of current dividends in cash, no earlier than the Disqualified Capital Stock being purchased, redeemed or otherwise acquired or retired; PROVIDED, HOWEVER, that
(other than Disqualified Stock), with a sale being deemed substantially concurrent if A) such redemptionpurchase, repurchase, retirementredemption, defeasance legal defeasance, acquisition or acquisition occurs not more than 120 days after such sale; provided that retirement shall be excluded in the calculation of the amount of any Restricted Payments and
(B) the Capital Stock Sale Proceeds from such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance exchange or other acquisition will sale shall be excluded from the calculation pursuant to clause (3)(ba)(3)(B) of the preceding paragraphabove;
(3) the defeasance, redemptionpurchase, repurchase, retirement redeem, legally defease, acquire or other acquisition of subordinated Indebtedness of the Company or retire for value any Guarantor with the net cash proceeds from an incurrence of, or Subordinated Obligations in exchange for, or out of the proceeds of the substantially concurrent sale of, Refinancing Debt or Debt permitted under clause (k) of the definition of "Permitted Refinancing IndebtednessDebt"; PROVIDED, HOWEVER, that such purchase, repurchase, redemption, legal defeasance, acquisition or retirement shall be excluded in the calculation of the amount of Restricted Payments;
(4) the payment of any dividend repurchase shares of, or distribution by a Restricted Subsidiary of the Company options to the holders of its Equity Interests on a pro rata basis;
(5) the repurchasepurchase shares of, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant common stock of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement from current or planformer officers, stock option agreement directors or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness employees of the Company or any Restricted Subsidiary of its Subsidiaries (a) at a purchase price not greater than 101.0% or permitted transferees of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 such current or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided thatformer officers, prior to directors or simultaneously with such purchaseemployees), repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect pursuant to the Notes and has completed terms of agreements (including employment agreements) or plans (or amendments thereto) approved by the repurchase Board of Directors under which such individuals purchase or redemption sell, or are granted the option to purchase or sell, shares of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;common stock; PROVIDED, HOWEVER, that:
(8) A) the payment aggregate amount of cash such repurchases shall not exceed $1.0 million in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; orcalendar year and
(9B) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9)of such repurchase, no other Default or Event of Default shall have occurred and be continuing (or would result therefrom); PROVIDED FURTHER, HOWEVER, that such repurchases shall be caused thereby. The included in the calculation of the amount of all Restricted Payments Payments;
(other than cash5) will be the fair market as long as no Default or Event of Default has occurred and is continuing, purchase, repurchase, redeem, legally defease, acquire or retire for value on the date of the Restricted Payment of the asset(s) outstanding Preferred Stock in exchange for, or securities proposed to be transferred or issued out of, consideration received by the Company or any Restricted Subsidiary from any Spectrum Sale as permitted under Section 4.10; PROVIDED, HOWEVER, that such purchase, repurchase, redemption, legal defeasance, acquisition or retirement shall be excluded in the calculation of the amount of Restricted SubsidiaryPayments;
(6) as long as no Default or Event of Default has occurred and is continuing, as pay cash dividends (not constituting a return on capital) on the case may be, pursuant Existing Preferred Stock under the terms related to the payment of dividends on the Existing Preferred Stock as in effect on the Issue Date and described under "Description of Material Indebtedness and Preferred Stock" in the Offering Memorandum; PROVIDED, HOWEVER, that any cash dividends paid with respect to the Existing Preferred Stock shall reduce amounts otherwise available for Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determinedPayments; and PROVIDED FURTHER, HOWEVER, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination no event shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.such
Appears in 1 contract
Limitation on Restricted Payments. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1i) declare or pay any dividend or make any other payment or distribution on account of the Company’s 's or any of its Restricted Subsidiaries’ ' Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which involving the Company or any of its Restricted Subsidiaries is a partySubsidiaries) or to the direct or indirect holders of the Company’s 's or any of its Restricted Subsidiaries’ ' Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which involving the Company is a partyCompany) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3iii) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturityGuarantees, except a payment, purchase, redemption, defeasance payment of interest or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or at the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4iv) make any Restricted Investment (all such payments and other actions set forth in these clauses (1i) through (4iv) above being collectively referred to as “Restricted Payments”"RESTRICTED PAYMENTS"), unless, at the time of and after giving effect to such Restricted Payment:
(1) , no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;; and
(21) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in for the first paragraph of Section 4.09; and
(3) Company's four most recent fiscal quarters for which internal financial statements are available is not less than 1.75 to 1.0, such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) the end of the next succeeding paragraph)fiscal year of the Company then most recently ended for which internal financial statements are available, is less than the sum, without duplication, of:
(aA) 50% of Available Cash Flow from Operations for the Consolidated Net Income fiscal year of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s then most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit)available, plus
(bB) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets Permitted Business or assets used or useful in a Permitted Business to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 of the Company) after the date of the Indenture as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(cC) to the extent that any Restricted Investment that was made after May 11, 2004 the date of the Indenture is sold for cash or Cash Equivalents or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment, including without limitation repayment of principal of any Restricted Investment constituting a loan or advance (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(dD) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004the date of the Indenture, the lesser of (i) the fair market value of the Company’s 's Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The Subsidiary (the amount determined at any time pursuant to items (b), (c) and (d) being referred to as the "INCREMENTAL FUNDS"); minus
(E) the aggregate amount of Restricted Payments previously made in reliance on Incremental Funds pursuant to this clause (1) or clause (2) below; or
(2) if the Fixed Charge Coverage Ratio for the Company's four most recent fiscal quarters for which internal financial statements are available is less than 1.75 to 1.0, such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries during the period commencing on the date such internal financial statements are available and ending on the date the next quarterly internal financial statements are available (such Restricted Payments for purposes of this clause (2) meaning only distributions on the Company's common stock and loans and advances to ▇▇▇▇▇▇▇▇ and its Subsidiaries), is less than the sum, without duplication, of:
(A) $50.0 million less the aggregate amount of all Restricted Payments made by the Company pursuant to this clause (2)(A) during the period ending on the last day immediately preceding the date on which such internal financial statements are available and beginning on the date of the Indenture; plus
(B) the aggregate amount of Incremental Funds at such time minus the aggregate amount of Restricted Payments previously made in reliance on such Incremental Funds pursuant to this clause (2) or clause (1) above.
(b) Notwithstanding the foregoing, the preceding provisions will not prohibit:
(1i) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on if at the date of declaration or the date of the notice of redemption, as the case may be, dividend payment would have complied with the provisions of the Indenture;
(2ii) so long as no Default or Event of Default has occurred and is continuing or would be caused thereby, the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of of, the substantially concurrent (a) contribution (other than from a Subsidiary of the Company) to the equity capital of the Company or (b) sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b1) (B) of the preceding paragraph;
(3iii) so long as no Default or Event of Default has occurred and is continuing or would be caused thereby, the defeasance, redemption, repurchase, retirement repurchase or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, of Permitted Refinancing Indebtedness;
(4iv) the payment of any distribution or dividend or distribution by a Restricted Subsidiary of the Company or to the holders of its such Restricted Subsidiary's Equity Interests on a pro rata basis;
(5v) so long as no Default or Event of Default has occurred and is continuing or would be caused thereby, dividends, distributions or advances to ▇▇▇▇▇▇▇▇ Group Affiliates, at times and in amounts equal to amounts expended by ▇▇▇▇▇▇▇▇ for the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company ▇▇▇▇▇▇▇▇ held by any current or former director, officer, employee or consultant member of the Company Company's (or any of its Restricted Subsidiaries Subsidiaries') management pursuant to any management equity subscription agreement or planagreement, stock option agreement or similar agreement or planagreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;period and provided further that if the amount so paid in any calendar year is less than $2.0 million, such shortfall may be used to so repurchase, redeem, acquire or retire Equity Interests in either of the next two calendar years in addition to the $2.0 million that may otherwise be paid in each such calendar year; and
(6vi) prior to the acquisition Credit Agreement Refinancing Date, the ability (i) to pay, directly or indirectly, dividends or make any other distributions in respect of Equity Interests by the Company in connection with the exercise its capital stock or pay any Debt or other obligation owed to ▇▇▇▇▇▇▇▇ or any of stock options its Subsidiaries, or stock appreciation rights by way (ii) to make loans or advances to ▇▇▇▇▇▇▇▇ or any of cashless exercise;its Subsidiaries.
(7c) In computing the purchaseamount of Restricted Payments previously made for purposes of the immediately preceding paragraph, repurchase, redemption, defeasance Restricted Payments made under clause (i) (but only if the declaration or such dividend or other acquisition or retirement for value distribution has not been counted in a prior period), clause (iv) (but only to the extent of subordinated Indebtedness of amounts paid to Holders other than the Company or any of its Restricted Subsidiary Subsidiaries), clause (av) at a purchase price not greater than 101.0% and clause (vi) of the principal amount thereof this paragraph shall be included, and Restricted Payments made under clauses (plus accrued ii), (iii) and unpaid interest(iv) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (bexcept as noted above) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;shall be excluded.
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9d) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 5.0 million, by an officer Officer of the Company and, in the case of amounts of over $50.0 million or more5.0 million, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.
Appears in 1 contract
Sources: Indenture (Northwest Pipeline Corp)
Limitation on Restricted Payments. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, take the following actions:
(1i) declare or pay any dividend on, or make any other payment or distribution on account to holders of, any shares of Capital Stock of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) shares of Qualified Capital Stock of the Company or payable in options, warrants or other rights to the Company or a Restricted Subsidiary purchase Qualified Capital Stock of the Company);
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct Affiliate thereof (other than any Restricted Subsidiary or indirect parent of the Companyexcept pursuant to a Permitted Investment) or any options, warrants or other rights to acquire such Capital Stock;
(3iii) make any principal payment on or with respect to, or purchaserepurchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled repayment principal payment, scheduled sinking fund payment or scheduled maturity, any Subordinated Indebtedness, except a payment, purchase, redemption, defeasance or other acquisition in any case out of the Net Cash Proceeds of any such Permitted Indebtedness referred to in anticipation clause (ix) of satisfying a sinking fund obligation, principal installment or the Stated Maturity definition thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4iv) make any Restricted Investment Investment; (all such payments and or other actions set forth described in these clauses (1i) through (4iv) above being collectively referred to as “"Restricted Payments”"), unless, unless at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such proposed Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemptionRestricted Payment, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (if other than cash) will , shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, amount determined by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a Board Resolution. Not later than ), (A) no Default or Event of Default shall have occurred and be continuing, (B) the Company could incur $1.00 of additional Indebtedness (excluding Permitted Indebtedness) in accordance with Section 10.11(a) hereof and (C) the aggregate amount of all Restricted Payments declared or made after the Series A Issue Date shall not exceed the sum (without duplication) of the following:
(1) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on August 1, 1996 and ending on the last day of the Company's last fiscal quarter ending prior to the date of making any such proposed Restricted Payment (excluding or, if such Consolidated Net Income shall be a loss, minus 100% of such loss), plus
(2) the aggregate Net Cash Proceeds received after the Series A Issue Date by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company, plus
(3) the aggregate Net Cash Proceeds received after the Series A Issue Date by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company, plus
(4) the aggregate Net Cash Proceeds received after the Series A Issue Date by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange, plus
(5) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after the Series A Issue Date from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the definition of Investment), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary that which was previously treated as a Restricted Payment, plus
(6) $2,500,000.
(b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (ii) and (iii) below) no Default or Event of Default shall have occurred and be continuing:
(i) the payment of any dividend on any Capital Stock of the Company or any Restricted Payment Subsidiary within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above);
(ii) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; and
(iii) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company. The actions described in the preceding clause clauses (2i), (3ii) and (iii) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (C) of paragraph (a), provided that any dividend paid pursuant to clause (4i) of this paragraph (b) shall reduce the amount that would otherwise be available under clause (C) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (i).
(c) In computing Consolidated Net Income under paragraph (a) above, (6), (7) or (8)1) the Company will deliver shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the Trustee an Officers’ Certificate stating financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment is would in the good faith determination of the Company be permitted and setting forth under the basis upon which the calculations required by requirements of this Section 4.07 were computed. For purposes of determining Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Section 4.07, Indenture notwithstanding any subsequent adjustments made in good faith to the event that a Restricted Payment meets the criteria of more than one Company's financial statements affecting Consolidated Net Income of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in for any manner that complies with this Section 4.07period.
Appears in 1 contract
Sources: Indenture (Veritas DGC Inc)
Limitation on Restricted Payments. (a) The Company will not, and will not permit any of its the Restricted Subsidiaries to, directly or indirectly:
(1i) declare or pay any dividend or make any other distribution or payment on or distribution on account in respect of the Company’s or any Capital Stock of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or payment made to the direct or indirect holders (in their capacities as such) of Capital Stock of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such Company (other than dividends or distributions payable solely in Equity Interests rights to purchase Capital Stock of the Company (other than Disqualified Redeemable Capital Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);); or
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to Capital Stock of the Notes Company (other than any such Capital Stock owned by a Restricted Subsidiary); or
(iii) make any principal payment on, or the Subsidiary Guarantees purchase, defease, repurchase, redeem or otherwise acquire or retire for value, prior to any scheduled repayment or scheduled maturity, except a paymentscheduled repayment, purchase, redemption, defeasance scheduled sinking fund payment or other acquisition of Stated Maturity, any Subordinated Indebtedness (other than any such Subordinated Indebtedness in anticipation of satisfying owed to a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionRestricted Subsidiary); or
(4iv) make any Restricted Investment (all other than a Permitted Investment) in any person; (such payments and other actions set forth or Investments described in these the preceding clauses (1i), (ii), (iii) through and (4iv) above being are collectively referred to as “"Restricted Payments”"), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such proposed Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemptionRestricted Payment, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (if other than in cash) will , shall be the fair market value on the date of the Restricted Payment Fair Market Value of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the such Restricted Payment. The fair market value ), (a) no Default shall have occurred and be continuing, (b) the aggregate amount of all Restricted Payments declared or made from and after the Issue Date would not exceed the sum of (1) 50% of the aggregate Consolidated Net Income of the Company accrued on a cumulative basis during the period (treated as one accounting period) beginning on September 29, 1996 and ending on the last day of the fiscal quarter of the Company immediately preceding the date of such proposed Restricted Payment (or, if such aggregate cumulative Consolidated Net Income of the Company for such period shall be a deficit, minus 100% of such deficit) plus (2) the aggregate net cash proceeds received by the Company either (x) as capital contributions in the form of common equity to the Company after the Issue Date or (y) from the issuance or sale of Capital Stock (excluding Redeemable Capital Stock but including Capital Stock issued upon the conversion of convertible Indebtedness, in exchange for outstanding Indebtedness or from the exercise of options, warrants or rights to purchase Capital Stock (other than Redeemable Capital Stock)) of the Company to any assets or securities that are required person (other than to be valued by this covenant will be determined, a Restricted Subsidiary of the Company) after the Issue Date plus (3) in the case of amounts under $50.0 millionthe disposition or repayment of any Investment constituting a Restricted Payment made after the Issue Date, by an officer amount equal to the lesser of the Company andreturn of capital with respect to such Investment and the initial amount of such Investment, in either case, less the case of amounts of $50.0 million or more, by the Board of Directors cost of the Company, whose determination shall be evidenced by a Board Resolutiondisposition of such Investment and (iii) the Company could incur $1.00 of additional Indebtedness under the proviso of the first paragraph of Section 10.12 hereof. Not later than the date For purposes of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2b)(2), upon the issuance of Capital Stock either from the conversion of convertible Indebtedness or exchange for outstanding Indebtedness or upon the exercise of options, warrants or rights, the amount counted as net cash proceeds received will be the cash amount received by the Company at the original issuance of the Indebtedness that is so converted or exchanged or from the issuance of options, warrants or rights, as the case may be, plus the incremental amount of cash received by the Company, if any, upon the conversion, exchange or exercise thereof.
(3b) None of the foregoing provisions of Section 10.14(a) will prohibit (i) the payment of any dividend within 60 days after the date of its declaration, if at the date of declaration such payment would be permitted by the provisions of this Indenture; (ii) so long as no Default shall have occurred and be continuing, the redemption, repurchase or other acquisition or retirement of any shares of any class of Capital Stock of the Company in exchange for, or out of the net proceeds of, a substantially concurrent issue and sale of other shares of Capital Stock (other than Redeemable Capital Stock) of the Company to any person (other than to a Restricted Subsidiary); provided that such net proceeds are excluded from clause (b)(2) of the preceding paragraph; (iii) so long as no Default shall have occurred and be continuing, any redemption, repurchase or other acquisition or retirement of Subordinated Indebtedness made by exchange for, or out of the net proceeds of, a substantially concurrent issue and sale of (4), a) Capital Stock (6), (7other than Redeemable Capital Stock) of the Company or (8)b) Indebtedness of the Company or any Guarantor so long as such Indebtedness (1) is subordinated to Senior Indebtedness and the Securities or Guarantor Senior Indebtedness and the Guarantees of such Guarantor, as the case may be, at least to the same extent as the Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, acquired or retired and (2) has no Stated Maturity earlier than the Stated Maturity for the final scheduled principal payment of the Securities; (iv) dividends paid or intercompany loans made by the Company to BBC for the purpose of paying operating expenses of BBC arising in the ordinary course of business, including, without limitation, for the payment of taxes; (v) Investments constituting Restricted Payments made as a result of the receipt of non-cash consideration from any Asset Sale made pursuant to and in compliance with Section 10.16 hereof; (vi) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one making of the categories Distribution in connection with the Recapitalization or (vii) payment made by the Company under the Income Taxes Agreement. In computing the amount of Restricted Payments described in previously made for purposes of clause (b) of the preceding paragraph, Restricted Payments under the immediately preceding clauses (1i) through and (9), or is entitled to v) shall be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07included.
Appears in 1 contract
Sources: Indenture (Blue Bird Corp)
Limitation on Restricted Payments. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees prior to any scheduled repayment or scheduled maturity, except a payment, purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unlessPayment if, at the time of and after giving effect to such the proposed Restricted Payment:
(1a) no any Default or Event of Default has would have occurred and is continuing or would occur as a consequence of such Restricted Paymentbe continuing;
(2b) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur could not Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph clause (a) of Section 4.094.11; andor
(3c) such Restricted Payment, together with the aggregate amount of expended or declared for all other Restricted Payments made by from the Company and its Restricted Subsidiaries after May 11, 2004 Issue Date would exceed the sum of (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:):
(a1) 50% of the aggregate Consolidated Net Income of the Company for accrued during the period (taken treated as one accounting period) from April 1, 2004 to commencing on the end Reference Date and ending on the last day of the Company’s most recently ended fiscal quarter for which internal financial statements are available at immediately preceding the time date of such proposed Restricted Payment (or, if such aggregate Consolidated Net Income for such period is shall be a deficitloss, less minus 100% of such deficitloss),
(2) the aggregate net cash proceeds, plus
or the Fair Market Value of Property other than cash (provided that, in the case of Property that is Capital Stock, such Capital Stock falls within the meaning of clause (b) 100% of the definition of “Additional Assets”), received by the Company from the issuance or sale (other than to a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any such Subsidiary for the benefit of their employees) by the Company of its Capital Stock (other than Disqualified Stock) after the Reference Date, net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually Incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof,
(3) the aggregate net cash proceeds, or the Fair Market Value of Property other than cash, received by the Company as capital contributions to the Company (other than from a Subsidiary of the Company) on or after the Issue Date,
(4) the aggregate net cash proceeds received by the Company from the issuance or sale (including the fair market value of other than to any Additional Assets to the extent acquired in consideration of Equity Interests Subsidiary of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue an employee stock ownership plan or sale of Equity Interests of trust established by the Company or any such Subsidiary for the benefit of their employees) on or after the Issue Date of convertible Indebtedness that has been converted into or exchanged for Capital Stock (other than Disqualified Stock) of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange or received by the Company from the issue any conversion or sale exchange of convertible Indebtedness issued or exchangeable Disqualified Stock or convertible or exchangeable debt securities sold (other than to any Subsidiary of the Company that have been converted into or exchanged an employee stock ownership plan or trust established by the Company or any such Subsidiary for the benefit of their employees) prior to the Issue Date, excluding:
(A) any such Equity Interests (other than Equity Interests (Indebtedness issued or Disqualified Stock or debt securities) sold to the Company or a Subsidiary of the Company)Company or an employee stock ownership plan or trust established by the Company or any such Subsidiary for the benefit of their employees, plusand
(cB) the aggregate amount of any cash or other Property distributed by the Company or any Restricted Subsidiary upon any such conversion or exchange,
(5) to the extent that not otherwise included in the Company’s Consolidated Net Income, an amount equal to the net reduction in Investments made by the Company and its Restricted Subsidiaries subsequent to the Issue Date in any Person resulting from:
(A) payments of interest on debt, dividends, repayments of loans or advances or other transfers or distributions of Property, in each case to the Company or any Restricted Investment Subsidiary from any Person other than the Company or a Restricted Subsidiary, and in an amount not to exceed the book value of such Investments previously made in such Person that was made after May 11were treated as Restricted Payments, 2004 is sold for cash or otherwise liquidated or repaid for cashor
(B) the designation of any Unrestricted Subsidiary as a Restricted Subsidiary, and in an amount not to exceed the lesser of of:
(i) the cash return book value of capital with respect to all Investments previously made in such Unrestricted Subsidiary that were treated as Restricted Investment (less the cost of dispositionPayments, if any) and and
(ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value Fair Market Value of the Company’s Investment and its Restricted Subsidiaries’ interest in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary, and
(6) $30.0 million. The limitations set forth in the preceding provisions paragraph will not prohibitprevent the Company or any Restricted Subsidiary from making the following Restricted Payments so long as, at the time thereof, no Default or Event of Default shall have occurred and be continuing:
(1a) the payment of any dividend on Capital Stock of the Company or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, Restricted Subsidiary within 60 days after the declaration thereof, if at such declaration date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would could have complied been paid in compliance with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5b) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant Capital Stock of the Company or any of its Restricted Subsidiaries pursuant to the terms of agreements (including employment agreements) or plans (including employee stock ownership plans but excluding other plans to purchase such Capital Stock in open market transactions, together with, in the case of employee stock ownership plans, loans to or Investments therein in an amount sufficient to fund such repurchase, redemption or other acquisition or retirement by such plan) approved by the Company’s Board of Directors, including any equity subscription agreement such repurchase, redemption, acquisition or plan, retirement of shares of such Capital Stock that is deemed to occur upon the exercise of stock option agreement options or vesting of restricted stock grants or similar agreement rights if such shares represent all or plana portion of the exercise price or are netted out or surrendered in connection with satisfying Federal income tax obligations; provided provided, however, that the aggregate price paid for all amount of such repurchasedrepurchase, redeemedredemptions, acquired acquisitions and retirements (but disregarding any transaction that does not result in the payment of cash by the Company or retired Equity Interests may any Restricted Subsidiary to or on behalf of another Person) shall not exceed the sum of:
(1) $2.0 7.5 million in any twelve-month period, and
(2) the aggregate net proceeds, if any, received by the Company during such twelve-month period from any issuance of such Capital Stock pursuant to such agreements or plans;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7c) the purchase, redemption or other acquisition or retirement for value of any Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate net cash proceeds of, a substantially concurrent issuance and sale (other than to a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any of its Subsidiaries, for the benefit of their employees) of Capital Stock of the Company (other than Disqualified Stock);
(d) the purchase, redemption, legal defeasance, acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of the Company (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any such Subsidiary for the benefit of their employees);
(e) the making of any principal payment on or the repurchase, redemption, legal defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the net proceeds of a substantially concurrent Incurrence (other than a sale to a Subsidiary of the Company) of (i) any other Subordinated Indebtedness so long as such new Indebtedness is Permitted Refinancing Indebtedness or (ii) with respect only to the Company’s 9⅜% senior subordinated notes due 2012, Senior Indebtedness, so long as at the time of and after giving effect to such Incurrence, the Company could Incur at least $1.00 of Indebtedness pursuant to clause (a) of Section 4.11 of this Indenture.
(f) loans, in an aggregate principal amount at any one time outstanding of not more than $2.0 million, made to officers, directors or employees of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, approved by the Board of Directors (or by a duly authorized officer) and in compliance with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, the net cash proceeds of which are used solely:
(1) to purchase common stock of the CompanyCompany in connection with a restricted stock or employee stock purchase plan, whose determination or to exercise stock options received pursuant to an employee or director stock option plan or other incentive plan, in a principal amount not to exceed the purchase price of such common stock or the exercise price of such stock options, or
(2) to refinance loans, together with accrued interest thereon, made pursuant to item (1) of this clause (f). The actions described in clauses (a) and (b) of this paragraph shall be evidenced by a Board Resolutionincluded in the calculation of the amount of Restricted Payments. Not later than the date of making any Restricted Payment (excluding any Restricted Payment The actions described in clauses (c), (d), (e) and (f) of this paragraph shall be excluded in the preceding calculation of the amount of Restricted Payments, provided that the net cash proceeds from any issuance or sale of Capital Stock or Indebtedness of the Company pursuant to such clause (c), (d) or (e) shall be excluded from any calculations pursuant to clause (2), (3), (4), (6), (7) or (8)4) under the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the immediately preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07paragraph.
Appears in 1 contract
Limitation on Restricted Payments. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1i) declare or pay any dividend on, or make any other payment or distribution on account in respect of, any shares of the Company’s or any Subsidiary’s Capital Stock (excluding dividends or distributions payable in shares of its Restricted Subsidiaries’ Equity Interests the Company’s Capital Stock or in options, warrants or other rights to purchase such Capital Stock, but including dividends or distributions payable in Redeemable Capital Stock or in options, warrants or other rights to purchase Redeemable Capital Stock (including, without limitation, other than dividends on such Redeemable Capital Stock payable in shares of such Redeemable Capital Stock)) held by any payment in connection with any merger or consolidation to which Person other than the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Wholly Owned Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Company);; or
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company;
(3) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to Capital Stock of the Notes Company or any Affiliate thereof (other than any Wholly Owned Subsidiary of the Subsidiary Guarantees prior to Company) or any scheduled repayment or scheduled maturityoptions, except a payment, purchase, redemption, defeasance warrants or other acquisition of any rights to acquire such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisitionCapital Stock; or
(4) make any Restricted Investment (all such payments and or any other actions set forth described in these clauses (1i) through and (4ii) above being are collectively referred to as “Restricted Payments”), unless, ) unless at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such proposed Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemptionRestricted Payment, repurchaseif other than cash, retirementas determined by the Board of Directors, defeasance or other acquisition will whose determination shall be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution conclusive and evidenced by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
Board Resolution): (5A) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The continuing; (B) the Company could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) under the provisions of Section 4.05; and (C) the aggregate amount of all Restricted Payments (other than cashRestricted Payments permitted by Section 4.06(b)(iv)) will be declared or made after April 2, 2009 (including the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in ) does not exceed the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.sum of:
Appears in 1 contract
Sources: Indenture (Marquee Holdings Inc.)
Limitation on Restricted Payments. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any distribution (other payment than dividends or distribution distributions payable in Qualified Capital Stock of the Company) on account or in respect of shares of the Company’s or any Capital Stock to holders of its Restricted Subsidiaries’ Equity Interests such Capital Stock (including, without limitation, including any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Companyconsolidation);
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company Company, Parent or any other direct or indirect parent of the CompanyCompany or any warrants, rights or options to purchase or acquire shares of any class of such Capital Stock;
(3) make any principal payment on or with respect toon, or purchase, defease, redeem, defease prepay, decrease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled final maturity, scheduled repayment or scheduled maturitysinking fund payment, except any Subordinated Obligations of any Issuer or any Guarantor (other than (i) from the Company or a Restricted Subsidiary of the Company or (ii) the payment, purchase, defeasance, redemption, defeasance prepayment, decrease, acquisition or other acquisition retirement for value of any such Indebtedness Subordinated Obligations in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereoffinal maturity, in each case, due within one year of the date of such payment, purchase, defeasance, redemption, defeasance prepayment, decrease, acquisition or other acquisitionretirement); or
(4) make any Restricted Investment (all such payments and other than Permitted Investments), (each of the foregoing actions set forth in these clauses (1), (2), (3) through and (4) above being collectively referred to as a “Restricted PaymentsPayment”), unless, unless at the time of and such Restricted Payment or immediately after giving effect to such Restricted Paymentthereto:
(1i) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2ii) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, the Company would have been permitted able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph proviso of Section 4.09; and
(3iii) such Restricted Payment, together with the aggregate amount of all Restricted Payments (including such proposed Restricted Payment) made subsequent to the Issue Date (other than Restricted Payments made by the Company pursuant to Sections 4.07(b)(2) through (9) and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7Sections 4.07(b)(11) and (8) 12)) (the amount expended for such purposes, if other than in cash, being the fair market value of the next succeeding paragraph), such property) is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 4.07.
Appears in 1 contract
Sources: Indenture (Neff Finance Corp.)
Limitation on Restricted Payments. (a) The Company will shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, take the following actions:
(1i) declare or pay any dividend on, or make any other payment or distribution on account to holders of, any shares of Capital Stock of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation to which the Company or any of its Restricted Subsidiaries is a party) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) shares of Qualified Capital Stock of the Company or payable in options, warrants or other rights to the Company or a Restricted Subsidiary purchase Qualified Capital Stock of the Company);
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests Capital Stock of the Company or any direct Affiliate thereof (other than any Restricted Subsidiary) or indirect parent of the Companyany options, warrants or other rights to acquire such Capital Stock;
(3iii) make any principal payment on or with respect to, or purchaserepurchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Subsidiary Guarantees value, prior to any scheduled repayment principal payment, scheduled sinking fund payment or scheduled maturity, any Subordinated Indebtedness, except a payment, purchase, redemption, defeasance or other acquisition of in any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year case out of the date proceeds of such paymentPermitted Refinancing Indebtedness, purchase, redemption, defeasance or other acquisition; or
(4iv) make any Restricted Investment Investment; (all such payments and or other actions set forth described in these clauses (1i) through (4iv) above being collectively referred to as “"Restricted Payments”"), unless, unless at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such proposed Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemptionRestricted Payment, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any current or former director, officer, employee or consultant of the Company or any of its Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.0 million in any twelve-month period;
(6) the acquisition of Equity Interests by the Company in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise;
(7) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of subordinated Indebtedness of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer;
(8) the payment of cash in lieu of fractional shares of Capital Stock in connection with any transaction otherwise permitted under this Section 4.07; or
(9) other Restricted Payments in an aggregate amount since May 11, 2004 not to exceed $25.0 million; provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under the preceding clause (9), no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The amount of all Restricted Payments (if other than cash) will , shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determined, in the case of amounts under $50.0 million, by an officer of the Company and, in the case of amounts of $50.0 million or more, amount determined by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a Board Resolution. Not later than ), (A) no Default or Event of Default shall have occurred and be continuing, (B) the Company could incur $1.00 of additional Indebtedness (excluding Permitted Indebtedness) in accordance with Section 10.12(a) hereof and (C) the aggregate amount of all Restricted Payments declared or made after the date of making any this Indenture shall not exceed the sum (without duplication) of the following:
(1) 50% of the Consolidated Net Income of the Company accrued on a cumulative basis during the period beginning on October 1, 1997 and ending on the last day of the Company's last fiscal quarter ending prior to the date of such proposed Restricted Payment (excluding or, if such Consolidated Net Income shall be a loss, minus 100% of such loss), plus
(2) the aggregate Net Cash Proceeds received after the date of this Indenture by the Company from the issuance or sale (other than to any of its Restricted Payment described Subsidiaries) of shares of Qualified Capital Stock of the Company or any options, warrants or rights to purchase such shares of Qualified Capital Stock of the Company, plus
(3) the aggregate Net Cash Proceeds received after the date of this Indenture by the Company (other than from any of its Restricted Subsidiaries) upon the exercise of any options, warrants or rights to purchase shares of Qualified Capital Stock of the Company, plus
(4) the aggregate Net Cash Proceeds received after the date of this Indenture by the Company from the issuance or sale (other than to any of its Restricted Subsidiaries) of Indebtedness or shares of Disqualified Capital Stock that have been converted into or exchanged for Qualified Capital Stock of the Company, together with the aggregate cash received by the Company at the time of such conversion or exchange, plus
(5) to the extent not otherwise included in Consolidated Net Income, the net reduction in Investments in Unrestricted Subsidiaries resulting from dividends, repayments of loans or advances, or other transfers of assets, in each case to the Company or a Restricted Subsidiary after the date of this Indenture from any Unrestricted Subsidiary or from the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as provided in the preceding clause definition of Investment), not to exceed in the case of any Unrestricted Subsidiary the total amount of Investments (2other than Permitted Investments) in such Unrestricted Subsidiary made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary after the date of this Indenture, plus (6) $25,000,000.
(b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (in the case of clauses (ii), (3iii) and (iv) below) no Default or Event of Default shall have occurred and be continuing:
(i) the payment of any dividend on any Capital Stock of the Company within 60 days after the date of declaration thereof, if at such declaration date such declaration complied with the provisions of paragraph (a) above (and such payment shall be deemed to have been paid on such date of declaration for purposes of any calculation required by the provisions of paragraph (a) above);
(ii) the repurchase, redemption or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash Proceeds of, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company;
(iii) the repurchase, redemption, repayment, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the aggregate Net Cash Proceeds from, a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of shares of Qualified Capital Stock of the Company; and
(iv) repurchases, acquisitions or retirements of shares of Qualified Capital Stock of the Company deemed to occur upon the exercise of stock options or similar rights issued under employee benefit plans of the Company if such shares represent all or a portion of the exercise price or are surrendered in connection with satisfying any federal income tax obligation. The actions described in clauses (i), (4ii), (6iii) and (iv) of this paragraph (b) shall be Restricted Payments that shall be permitted to be made in accordance with this paragraph (b) but shall reduce the amount that would otherwise be available for Restricted Payments under clause (C) of paragraph (a), provided that any dividend paid pursuant to clause (7i) or of this paragraph (8)b) shall reduce the amount that would otherwise be available under clause (C) of paragraph (a) when declared, but not also when subsequently paid pursuant to such clause (i).
(c) In computing Consolidated Net Income under paragraph (a) above, (1) the Company will deliver shall use audited financial statements for the portions of the relevant period for which audited financial statements are available on the date of determination and unaudited financial statements and other current financial data based on the books and records of the Company for the remaining portion of such period and (2) the Company shall be permitted to rely in good faith on the Trustee an Officers’ Certificate stating financial statements and other financial data derived from the books and records of the Company that are available on the date of determination. If the Company makes a Restricted Payment which, at the time of the making of such Restricted Payment is would in the good faith determination of the Company be permitted and setting forth under the basis upon which the calculations required by requirements of this Section 4.07 were computed. For purposes of determining Indenture, such Restricted Payment shall be deemed to have been made in compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9), or is entitled to be made pursuant to the first paragraph of this Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion) such Restricted Payment in Indenture notwithstanding any manner that complies with this Section 4.07.subsequent
Appears in 1 contract
Limitation on Restricted Payments. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectlymake any Restricted Payment, except that, so long as the representations and warranties deemed to be made pursuant to Section 11.7(b) are true and correct in all material respects as of the date such Restricted Payment is made, the following Restricted Payments may be made:
(1i) declare or pay any dividend or make any other payment or distribution Restricted Payments on account of amounts payable under the Company’s Prior Tax Sharing Agreement, with respect to state and local taxes and federal taxes; provided, however, that no such Restricted Payment (whether in cash or any of its Restricted Subsidiaries’ Equity Interests otherwise) shall be made more than ten (including, without limitation, any payment in connection with any merger or consolidation 10) Business Days prior to the date upon which the Company or any of its Restricted Subsidiaries is a party) or related liability to the direct Internal Revenue Service (or indirect holders of the Company’s relevant state or any of its Restricted Subsidiaries’ Equity Interests in their capacity as local taxing authority) for tax (including estimated taxes paid) is paid (or, if no such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or payable to the Company or a Restricted Subsidiary of the Companytaxes are payable, ordinarily would have been due);
(2ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation to which the Company is a party) any Equity Interests of the Company or any direct or indirect parent of the Company[Intentionally Omitted];
(3iii) make any principal payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated Restricted Payments made from time to the Notes or the Subsidiary Guarantees prior time to any scheduled repayment or scheduled maturity, except a payment, finance Revlon’s purchase, redemption, defeasance or other acquisition of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or the Stated Maturity thereof, in each case, due within one year of the date of such payment, purchase, redemption, defeasance or other acquisition; or
(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 4.09; and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after May 11, 2004 (excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7) and (8) of the next succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from April 1, 2004 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds received by the Company (including the fair market value of any Additional Assets to the extent acquired in consideration of Equity Interests of the Company (other than Disqualified Stock)) since May 11, 2004 as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment that was made after May 11, 2004 is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Restricted Subsidiary after May 11, 2004, the lesser of (i) the fair market value of the Company’s Investment in such Subsidiary as of the date of such redesignation or (ii) such fair market value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary. The preceding provisions will not prohibit:
(1) the payment of any dividend or distribution or the consummation of any irrevocable redemption of debt that is subordinate to the Notes, within 60 days after the date of declaration of such dividend or the delivery of any irrevocable notice of redemption, as the case may be, if the dividend, distribution or redemption payment on the date of declaration or the date of the notice of redemption, as the case may be, would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock), with a sale being deemed substantially concurrent if such redemption, repurchase, retirement, defeasance or acquisition occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase, retirement or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
(4) the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for value of, or payment of amounts owing in respect of, any Equity Interests shares, interests, rights to purchase, warrants, options, participations, stock appreciation rights, performance units or other equivalents or interests in the equity of the Company or any Restricted Subsidiary of the Company Revlon held by any current or former director, officer, consultant or employee or consultant of Revlon, the Company or any Subsidiary of its the Company in such person’s role as a director, officer, consultant or employee (or by their estates or any beneficiaries of their estates); provided, however, that (x) the sum of (1) the aggregate amount of Restricted Subsidiaries Payments made pursuant to any equity subscription agreement or plan, stock option agreement or similar agreement or plan; provided that this clause (iii) and (2) the aggregate price paid for all such repurchasedamount of open-market purchases of common stock and restricted stock of Revlon together with any other investments made as permitted under Section 11.8(g), redeemed, acquired or retired Equity Interests may does not exceed $2.0 million 15,000,000, plus $8,000,000 for each calendar year commencing with calendar year 2011 and (y) amounts available pursuant to this clause (iii) to be utilized for Restricted Payments during any calendar year which are not utilized during such year may be carried forward and utilized in any twelve-month periodsucceeding calendar year;
(6iv) subject to the limitations set forth in Section 11.8(g), Restricted Payments made from time to time to finance the Investments contemplated by Section 11.8(g);
(v) the acquisition declaration and payment of Equity Interests dividends by the Company to its Parent in connection with amounts required for the exercise Parent to pay:
(A) actual expenses, other than those paid to Affiliates of stock options or stock appreciation rights by way of cashless exercisethe Company, incidental to being a publicly reporting company;
(7B) so long as the purchaseCompany is a member of a consolidated, repurchasecombined, redemptionunitary or similar group with the Parent for U.S. federal, defeasance state or other acquisition or retirement for value of subordinated Indebtedness local income tax purposes, (1) federal, state and local income taxes incurred by such Parent companies, but only to the extent such income taxes are attributable to the income of the Company or any Restricted Subsidiary (a) at a purchase price not greater than 101.0% and the Recourse Subsidiaries, provided that in each case the amount of the principal amount thereof (plus accrued and unpaid interest) in the event of a Change of Control in accordance with provisions similar to Section 4.15 or (b) at a purchase price not greater than 100.0% of the principal amount thereof (plus accrued and unpaid interest) in accordance with provisions similar to Section 4.10; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenants payments with respect to any fiscal year does not exceed the Notes amount that the Company and has completed the repurchase Recourse Subsidiaries would have been required to pay in respect of such income taxes for such fiscal year were the Company and its Recourse Subsidiaries a consolidated or redemption combined group of all Notes validly tendered for payment in connection with which the Company was the common Parent, and (2) amounts required to pay federal, state and local income taxes to the extent attributable to the income of the Non-Recourse Subsidiaries, if any, but only to the extent of the amount actually received by the Company from such Change of Control Offer or Asset Sale Offer;Non-Recourse Subsidiaries; and
(8) the payment of cash in lieu of fractional shares of Capital Stock C) so long as no Default has occurred and is continuing (after giving effect thereto), reasonable fees and expenses incurred in connection with any successful or unsuccessful debt or equity offering or any successful or unsuccessful acquisition or strategic transaction otherwise permitted under this Section 4.07; orby the Parent;
(9vi) other so long as no Default has occurred and is continuing (after giving effect thereto), additional Restricted Payments to a Parent or any Affiliate of the Company, whether in respect of management fees or otherwise, in an aggregate amount since May 11which, 2004 when taken together with the aggregate amount of all defeasances, prepayments and repurchases of Indebtedness made pursuant to clause (ix) of Section 11.9(c) does not to exceed $25.0 million10,000,000, plus $10,000,000 for each calendar year commencing with calendar year 2011; provided, howeverthat the Company may carry over and utilize in any subsequent calendar year, in addition to the amounts permitted for such fiscal year, any portion of the amounts otherwise permitted for prior calendar years to be paid pursuant to this clause (vi) that were not in fact utilized to make Restricted Payments pursuant to this clause (vi) or to defease, prepay or repurchase Indebtedness pursuant to clause (ix) of Section 11.9(c);
(vii) so long as no Default has occurred and is continuing (after giving effect thereto), other Restricted Payments; provided, that at the time of, and after giving effect to, any such Restricted Payment permitted under Payments, (x) as of the preceding clause last day of the most recent four consecutive fiscal quarters with respect to which financial statements shall have been delivered pursuant to Section 9.1(k) or Section 10.1, the Consolidated Fixed Charge Coverage Ratio of the Company and its Subsidiaries shall not be less than 1.1:1.0 on a pro forma basis and (9), y) the Excess Availability shall be greater than 25% of the Maximum Availability;
(viii) so long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby. The (after giving effect thereto), other Restricted Payments in an amount which, when taken together with (A) all other Restricted Payments made pursuant to this clause (viii) after the Closing Date and (B) the aggregate amount of all defeasances, prepayments and repurchases of Indebtedness made pursuant to clause (x) of Section 11.9(c) after the Closing Date, do not exceed $35,000,000;
(ix) so long as no Default has occurred and is continuing (after giving effect thereto), Restricted Payments (other in an aggregate amount not to exceed the aggregate net cash proceeds of Available Contributions; provided, that at the time of, and after giving effect to, such Restricted Payments, the Excess Availability shall be greater than cash) will be the fair market value on the date 25% of the Restricted Payment Maximum Availability;
(x) so long as no Default has occurred and is continuing after giving effect to such transactions: amounts paid or property transferred pursuant to the Company Tax Sharing Agreement;
(xi) any “deemed dividend” for accounting purposes resulting from, or in connection with the filing of a consolidated or combined federal income tax return by any Parent or any direct or indirect parent or Subsidiary of any Parent (and not involving any cash distribution from the asset(s) or securities proposed to be transferred or issued Company except as permitted by the Company or such Tax Sharing Agreement); and
(xii) payments of Receivables Fees other than to a Parent.
(b) The making of each Restricted Subsidiary, as the case may be, Payment pursuant to Section 11.7(a) shall constitute a representation and warranty by the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant will be determinedCompany that, in the case of amounts under $50.0 million, by an officer on and as of the Company and, in the case of amounts of $50.0 million or more, by the Board of Directors of the Company, whose determination shall be evidenced by a Board Resolution. Not later than the date of making any Restricted Payment (excluding any Restricted Payment described in the preceding clause (2), (3), (4), (6), (7) or (8)) the Company will deliver to the Trustee an Officers’ Certificate stating that upon which such Restricted Payment is permitted made (both before and setting forth after giving effect to the basis upon which the calculations required by this Section 4.07 were computed. For purposes of determining compliance with this Section 4.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (9making thereof), or is entitled to be made pursuant to the first paragraph of this representations and warranties contained in Section 4.07, the Company will be permitted to divide or classify (or later divided or classify or reclassify in whole or in part in its sole discretion8.10 and Section 8.15(a) such Restricted Payment in any manner that complies with this Section 4.07are true and correct.
Appears in 1 contract
Sources: Revolving Credit Agreement (Revlon Consumer Products Corp)