Based on the provided reference, Plant Expansion refers to a specific type of company action involving its physical facilities.
Specifically, according to the definition provided, Plant Expansion means:
- A publicly announced expansion of an existing plant or the construction of a new plant.
- The plant must be owned or planned to be owned by the Company or one of its Subsidiaries.
- The Company is required to provide the Administrative Agent with a description of the expansion or construction project, along with relevant financial information related to it.
This defined term is typically used in legal or financial documents, such as loan agreements, where specific conditions or reporting requirements are tied to significant corporate actions like expanding facilities.
Understanding the Key Elements
Breaking down the definition helps clarify its scope:
- Publicly Announced: This implies that the expansion or new construction project has been made known to the public or relevant parties, not just an internal plan.
- Ownership: The facility being expanded or constructed must belong to the main Company or entities it controls (Subsidiaries).
- Notification and Information: A critical component is the requirement to formally inform and provide financial details to a specific party, the "Administrative Agent." This suggests the definition is part of an agreement where the Administrative Agent plays a role (e.g., managing a loan or financing).
These elements distinguish this specific contractual definition of "Plant Expansion" from a general business concept of simply growing facilities.
Why Define Plant Expansion?
Defining terms like "Plant Expansion" precisely in agreements is crucial because specific rights, obligations, or financial covenants may be triggered by such actions. For instance, a loan agreement might require the company to maintain certain financial ratios after a Plant Expansion, or it might require prior consent from the Administrative Agent.
| Element | Description |
|---|---|
| Action | Expansion of existing plant OR construction of new plant. |
| Announcement | Must be publicly announced. |
| Ownership | Plant must be owned or to be owned by the Company or a Subsidiary. |
| Reporting | Company must provide description and financial info to Administrative Agent. |
This detailed definition ensures clarity and sets specific conditions for what qualifies as a "Plant Expansion" within the context of the agreement it governs.
