Additional Issuances of Notes. (a) At any time during the Reinvestment Period (or, in the case of an issuance solely of additional Subordinated Notes or additional Junior Mezzanine Notes, at any time), pursuant to a supplemental indenture in accordance with Article VIII and subject to Section 3.3, the Asset Manager, in its sole discretion, may direct the Issuer to issue or incur (y) additional Notes under this Indenture of each existing Class (on a pro rata basis across all Classes of Notes (based on the Aggregate Outstanding Amount of each Class of Notes immediately prior to such issuance)) and/or (z) additional Subordinated Notes and/or new Junior Mezzanine Notes (such additional notes described in clauses (y) and (z), collectively, “Additional Notes”) and (I) use the net proceeds to acquire Underlying Assets, (II) in the case of an additional issuance of Subordinated Notes, apply all or a portion of the net proceeds from such additional issuance to any Permitted Use (as directed by the Asset Manager) or (III) for any other purpose permitted hereunder; provided that with respect to any issuance of Additional Notes the following conditions are met: (i) Rating Agency Confirmation has been received in respect of such additional issuance; (ii) such issue is approved by the Asset Manager and, if additional Class A-1 Notes or Additional Notes ranking pari passu with the existing Class A-1 Notes are included in the additional issuance, a Majority of the Class A-1 Notes; (iii) in the case of any Rated Notes, such issue does not exceed 100% of the original issue amount of each applicable Class of Rated Notes; (iv) except for an issuance of new Junior Mezzanine Notes, the terms of the Additional Notes issued are identical to the respective terms of previously issued Notes of each applicable Class except for the terms related to the issuance price, the date of issuance, interest rate in the case of Rated Notes, date on which interest begins to accrue and the first Payment Date for such Additional Notes; provided, that the interest rate on such Additional Notes may not exceed the Note Interest Rate on the corresponding, existing Class of Notes; (v) except for an additional issuance of Subordinated Notes to the Retention Holder, an Opinion of Counsel must be delivered to the Trustee to the effect that any additional Class A-1 Notes, Class A-2 Notes or Class B Notes will be treated as indebtedness for U.S. federal income tax purposes; provided, however, that the opinion described above will not be required with respect to any additional Notes that bear a different securities identifier from the Notes of the same Class that are Outstanding at the time of the additional issuance; (vi) the expenses in connection with such additional issuance have been paid out of the gross proceeds of such issuance or, if not so paid, shall be adequately provided for as Administrative Expenses; (vii) except for an additional issuance of Subordinated Notes to the Retention Holder, each Holder of a Class of previously issued Notes of which Additional Notes are a part is given at least 30 days prior notice of the issuance and has been offered an opportunity to purchase Additional Notes such that its proportional ownership of such Class prior to the additional issuance is maintained following the additional issuance; (viii) the proceeds of the issuance of any Additional Notes (net of fees and expenses incurred in connection with such issuance) will be treated as Principal Proceeds; (ix) such additional issuance will be accomplished in a manner that allows the Issuer to accurately provide (or cause to be provided) any tax information relating to original issue discount required under this Indenture to be provided to the Holders of the Notes (including the Additional Notes); (x) any additional Subordinated Notes shall be issued only to the Retention Holder; and (xi) the Overcollateralization Ratio with respect to each Class of Notes is not reduced after giving effect to such issuance. (b) At any time the Issuer may, at the direction or with the written consent of the Asset Manager, issue Additional Notes of one or more new classes that will be subordinate in right of payment of principal and interest to all existing Classes of Notes other than the Subordinated Notes (an “Additional Equity Issuance”), pursuant to a supplemental indenture in accordance with Article VIII and apply the net proceeds from such additional issuance to any Permitted Use (as directed by the Asset Manager, unless designated as Interest Proceeds pursuant to the definition thereof); provided that (i) the Issuer shall issue an authentication order for the Additional Notes; (ii) if such class is rated by any Rating Agency, such rating has been assigned; (iii) the expenses in connection with such additional issuance have been paid or adequately provided for as Administrative Expenses; (iv) require each Additional Equity Issuance to yield net proceeds to the Issuer in an amount not less than $1,000,000 (unless the proceeds will be used to acquire Workout Loans or Restructured Loans); and (v) each Holder of Subordinated Notes is given at least 30 days prior notice of the issuance and offered an opportunity to purchase Additional Notes such that its proportional ownership of such Additional Notes is no less than its proportional interest of Subordinated Notes prior to the additional issuance. The proceeds of each Additional Equity Issuance shall be treated as Interest Proceeds and/or Principal Proceeds at the reasonable discretion of the Asset Manager (on behalf of the Issuer) and may be used to cure the failure to satisfy any Coverage Tests, acquire additional Underlying Assets and Eligible Investments, enter into Hedge Agreements and pay expenses related to such issuance. (c) For the avoidance of doubt, the Issuer may, at any time pursuant to a supplemental indenture in accordance with Article VIII, issue Replacement Debt in the form of Additional Notes in connection with a Refinancing for the Class or Classes being refinanced. (d) At any time, pursuant to a supplemental indenture in accordance with Article VIII, the Issuer may, at the direction or with the consent of the Asset Manager issue a subordinated funding note to receive payments that would otherwise be payable as the Subordinated Asset Management Fee and/or the Incentive Asset Management Fee. (e) Any Additional Notes issued pursuant to Section 2.11(a) or (b) that constitutes Notes shall be subject to the terms of this Indenture as if such Notes had been issued on the date hereof. In connection with the issuance of any Additional Notes of an existing Class, the Issuer shall, to the extent required by the rules thereof, provide any stock exchange then listing such Class with a listing circular or an offering memorandum supplement relating to such Additional Notes. (f) Notice and execution copies of the supplemental indenture related to each issuance of Additional Notes will be provided as required under Article VIII and to the extent Rating Agency Confirmation is required under clause (a) above, the Trustee will provide notice to Holders that such Rating Agency Confirmation has been received (which may be by forwarding the letter or press release issued by such Rating Agency).
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Additional Issuances of Notes. (a) At any time during the Reinvestment Period (or, in the case of an issuance solely of additional Subordinated Notes or additional Junior Mezzanine Notes, at any time), pursuant to a supplemental indenture in accordance with Article VIII and subject to Section 3.3, the Asset Manager, in its sole discretion, may direct the Issuer to issue or incur (y) additional Notes notes under this Indenture of each existing Class (on a pro rata basis across all Classes of Notes (based on the Aggregate Outstanding Amount of each Class of Notes immediately prior to such issuance)) and/or (z) additional Subordinated Notes and/or new Junior Mezzanine Notes (such additional notes described in clauses (y) and (z), collectively, “"Additional Notes”") and (I) use the net proceeds to acquire Underlying Assets, (II) in the case of an additional issuance of Subordinated Notes, apply all or a portion of the net proceeds from such additional issuance to any Permitted Use (as directed by the Asset Manager) or (III) for any other purpose permitted hereunder; provided that with respect to any issuance of Additional Notes the following conditions are met:
(i) (x) unless only additional Subordinated Notes or additional Junior Mezzanine Notes are being issued, Rating Agency Confirmation has been received in respect of such additional issuance and (y) if only additional Subordinated Notes or additional Junior Mezzanine Notes are being issued, the Rating Agency has been notified of such additional issuance;
(ii) such issue is approved by the Asset Manager and, if additional Class A-1 A Notes or Additional Notes ranking pari passu with the existing Class A-1 A Notes are included in the additional issuance, a Majority of the Class A-1 A Notes;
(iii) in the case of any Rated Notes, such issue does not exceed 100% of the original issue amount of each applicable Class of Rated Notes;
(iv) except for an issuance of new Junior Mezzanine Notes, the terms of the Additional Notes issued are identical to the respective terms of previously issued Notes of each applicable Class except for the terms related to the issuance price, the date of issuance, interest rate in the case of Rated Notes, date on which interest begins to accrue and the first Payment Date for such Additional Notes; provided, that the interest rate on such Additional Notes may not exceed the Note Interest Rate on the corresponding, existing Class of Notes; provided, further, such Additional Notes must be issued at a Cash sales price equal to or greater than the principal amount of the corresponding, existing Class of Notes;
(v) except for an additional issuance of Subordinated Notes to the Retention Holder, an Opinion of Counsel must be delivered to the Trustee to the effect that any additional Class A-1 Notes, Class A-2 A Notes or Class B Notes will be treated as indebtedness for U.S. federal income tax purposes; provided, however, that the opinion described above will not be required with respect to any additional Notes that bear a different securities identifier from the Notes of the same Class that are Outstanding at the time of the additional issuance;
(vi) the expenses in connection with such additional issuance have been paid out of the gross proceeds of such issuance or, if not so paid, shall be adequately provided for as Administrative Expenses;
(vii) except for an additional issuance of Subordinated Notes to the Retention Holder, each Holder of a Class of previously issued Notes of which Additional Notes are a part is given at least 30 days prior notice of the issuance and has been offered an opportunity to purchase Additional Notes such that its proportional ownership of such Class prior to the additional issuance is maintained following the additional issuance;
(viii) the proceeds of the issuance of any Additional Notes (net of fees and expenses incurred in connection with such issuance) will be treated as Principal Proceeds;
(ix) such additional issuance will be accomplished in a manner that allows the Issuer to accurately provide (or cause to be provided) any tax information relating to original issue discount required under this Indenture to be provided to the Holders of the Notes (including the Additional Notes);
(x) any additional Subordinated Notes shall be issued only to the Retention Holder; and
(xi) the Overcollateralization Ratio with respect to each Class of Notes is not reduced after giving effect to such issuance.
(b) At any time the Issuer may, at the direction or with the written consent of the Asset Manager, issue Additional Notes of one or more new classes that will be subordinate in right of payment of principal and interest to all existing Classes of Notes other than the Subordinated Notes (an “"Additional Equity Issuance”"), pursuant to a supplemental indenture in accordance with Article VIII and apply the net proceeds from such additional issuance to any Permitted Use (as directed by the Asset Manager, unless designated as Interest Proceeds pursuant to the definition thereof); provided that (i) the Issuer shall issue an authentication order for the Additional Notes; (ii) if such class is rated by any Rating Agency, such rating has been assigned; (iii) the expenses in connection with such additional issuance have been paid or adequately provided for as Administrative Expenses; (iv) require each Additional Equity Issuance to yield net proceeds to the Issuer in an amount not less than $1,000,000 (unless the proceeds will be used to acquire Workout Loans or Restructured Loans); and (v) each Holder of Subordinated Notes is given at least 30 days prior notice of the issuance and offered an opportunity to purchase Additional Notes such that its proportional ownership of such Additional Notes is no less than its proportional interest of Subordinated Notes prior to the additional issuance. The proceeds of each Additional Equity Issuance shall be treated as Interest Proceeds and/or Principal Proceeds at the reasonable discretion of the Asset Manager (on behalf of the Issuer) and may be used to cure the failure to satisfy any Coverage Tests, acquire additional Underlying Assets and Eligible Investments, enter into Hedge Agreements and pay expenses related to such issuance.
(c) For the avoidance of doubt, the Issuer may, at any time pursuant to a supplemental indenture in accordance with Article VIII, issue Replacement Debt in the form of Additional Notes in connection with a Refinancing for the Class or Classes being refinanced.
(d) At any time, pursuant to a supplemental indenture in accordance with Article VIII, the Issuer may, at the direction or with the consent of the Asset Manager issue a subordinated funding note to receive payments that would otherwise be payable as the Subordinated Asset Management Fee and/or the Incentive Asset Management Fee.
(e) Any Additional Notes issued pursuant to Section 2.11(a) or (b) that constitutes Notes shall be subject to the terms of this Indenture as if such Notes had been issued on the date hereof. In connection with the issuance of any Additional Notes of an existing Class, the Issuer shall, to the extent required by the rules thereof, provide any stock exchange then listing such Class with a listing circular or an offering memorandum supplement relating to such Additional Notes.
(f) Notice and execution copies of the supplemental indenture related to each issuance of Additional Notes will be provided as required under Article VIII and to the extent Rating Agency Confirmation is required under clause (a) above, the Trustee will provide notice to Holders that such Rating Agency Confirmation has been received (which may be by forwarding the letter or press release issued by such Rating Agency).
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Sources: Indenture (Ares Capital Corp)