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MHS » Topics » The operating and financial restrictions imposed by our debt agreements could restrict our ability to finance operations and capital needs or to engage in other business activities.

This excerpt taken from the MHS 10-K filed Mar 1, 2005.

The operating and financial restrictions imposed by our debt agreements could restrict our ability to finance operations and capital needs or to engage in other business activities.

 

Restrictions include limitations on our and our restricted subsidiaries’ ability to, among other things:

 

  •   Borrow funds and issue preferred stock;

 

  •   Pay dividends on our stock or repurchase our stock;

 

  •   Create liens;

 

  •   Enter into sale and leaseback transactions;

 

  •   Use derivative instruments;

 

  •   Engage in certain transactions with affiliates;

 

  •   Consolidate, merge or sell assets;

 

  •   Designate our subsidiaries as unrestricted subsidiaries; and

 

  •   Make fundamental changes in our corporate existence and our principal business.

 

In addition, the agreements require us to comply with specified financial ratios and tests including a maximum leverage ratio and a minimum fixed charge coverage ratio. These restrictive covenants and financial ratios and tests restrict our financial flexibility. Because the indenture and the agreements governing our senior secured credit facility and accounts receivable financing facility have customary cross-default provisions, if debt is accelerated under one of these agreements, debt under one or both of the other agreements may also be accelerated.

 

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