Incurrence of Additional Indebtedness. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, acquire, become liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including, without limitation, Acquired Indebtedness); provided, however, that, the Company and the Restricted Subsidiaries may incur Indebtedness (including, without limitation, Acquired Indebtedness) if on the date of the incurrence of such Indebtedness, after giving pro forma effect to the incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of the Company is at least 2.0 to 1.0; provided, further, that any Restricted Subsidiary of the Company that is not or will not, upon such incurrence, become a Guarantor may not incur Indebtedness under this paragraph if, after giving pro forma effect to such incurrence (including a pro forma application of the net proceeds therefrom), the aggregate principal amount of Indebtedness of such non-Guarantor Subsidiary outstanding under this paragraph at such time would exceed the greater of (A) $35.0 million or (B) 30% of Consolidated EBITDA for the Applicable Measurement Period. (b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Indebtedness”): (1) Indebtedness under the Notes issued on the Issue Date (including the related Note Guarantees); (2) Indebtedness incurred pursuant to Credit Facilities in an aggregate principal amount at any time outstanding not to exceed the greater of (a) $275.0 million and (b) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated Secured Debt Ratio would be no greater than 2.25 to 1.0; provided that, solely for purposes of determining the amount of Indebtedness that may be incurred under clause (2)(b), all Indebtedness incurred under this clause (2) shall be treated as Indebtedness secured by Liens (whether or not is it so secured); (3) Indebtedness of the Company and its Restricted Subsidiaries outstanding on the Issue Date (other than Indebtedness under clause (1) and (2) of this Section 4.09(b)) (including any amendments or replacements thereof that do not increase the principal amount); (4) Swap Obligations of the Company or any of its Restricted Subsidiaries; provided, however, that such Swap Obligations are entered into for the purpose of mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by the Company or such Restricted Subsidiary, or changes in the value of securities issued or held by the Company or such Restricted Subsidiary or held by Death Care Trusts, and in each case, not entered into for purposes of speculation; (5) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary of the Company owing to and held by the Company or any other Restricted Subsidiary of the Company; provided, however, that: (a) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other the Company or a Restricted Subsidiary of the Company, and (b) any sale or other transfer (excluding Permitted Liens) of any such Indebtedness to a Person other than the Company or a Restricted Subsidiary of the Company, shall be deemed, in each case, to be the incurrence of Indebtedness by the Company or such Restricted Subsidiary, as the case may be, not permitted by this clause (5); (a) obligations pursuant to any cash management agreement and other Indebtedness in respect of netting services, overdraft protections and similar arrangements and (b) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; (7) Indebtedness of the Company or any of its Restricted Subsidiaries represented by letters of credit, pledges or deposits for the account of the Company or such Restricted Subsidiary, as the case may be, in order to provide security for workers’ compensation claims, payment obligations in connection with health, disability or other employee benefits or property, casualty or life insurance or self-insurance, the purchase of goods or other requirements in the ordinary course of business; (8) Indebtedness represented by guarantees by the Company or its Restricted Subsidiaries of Indebtedness otherwise permitted to be incurred under this Indenture; provided that, in the case of a guarantee by a Restricted Subsidiary, such Restricted Subsidiary complies with Section 4.17 to the extent applicable; (9) Indebtedness of the Company or any of its Restricted Subsidiaries in respect of bid, payment and performance bonds, bankers’ acceptances, workers’ compensation claims, surety or appeal bonds, payment obligations in connection with insurance or similar obligations, and bank overdrafts (and letters of credit in respect thereof) in the ordinary course of business; (10) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees, earn-outs, hold backs, incentives, non-competes, consulting, indemnities or obligations (contingent or other) in respect of purchase price adjustments or other indemnities in connection with the acquisition or disposition of assets or Capital Stock; (11) Indebtedness of (x) the Company or any Restricted Subsidiary incurred or issued to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged into or amalgamated or consolidated with the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger, amalgamation or consolidation, either: (a) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in Section 4.09(a); or (b) the Consolidated Fixed Charge Coverage Ratio of the Company and its Restricted Subsidiaries would not be lower than immediately prior to such acquisition, merger, amalgamation or consolidation; provided, further, that any Restricted Subsidiary of the Company that is not or will not, upon such incurrence, become a Guarantor may not incur Indebtedness under clause (x) of this clause (11) if, after giving pro forma effect to such incurrence (including a pro forma application of the net proceeds therefrom), the aggregate principal amount of Indebtedness of such non-Guarantor Subsidiary outstanding under clause (x) of this clause (11) at such time would exceed the greater of (A) $35.0 million or (B) 35% of Consolidated EBITDA for the Applicable Measurement Period; (12) Indebtedness represented by Capitalized Lease Obligations and Purchase Money Indebtedness of the Company and its Restricted Subsidiaries in an aggregate principal amount at any time outstanding, including any Refinancing Indebtedness in respect thereof, not to exceed the greater of (A) $35.0 million or (B) 35% of Consolidated EBITDA for the Applicable Measurement Period; (13) Indebtedness of the Company evidenced by commercial paper issued by the Company; provided that the aggregate outstanding principal amount of Indebtedness incurred pursuant to clause (2) of this Section 4.09(b) and this clause (13) does not exceed the maximum amount of Indebtedness permitted under clause (2) of this Section 4.09(b); (14) Refinancing Indebtedness in respect of Indebtedness described in clauses (1), (3), (4), (10), (11), (12) and (17) of this Section 4.09(b) and this clause (14); (15) Indebtedness of any Foreign Subsidiary in an aggregate principal amount at any time outstanding not to exceed the greater of $30.0 million or 10% of such Foreign Subsidiary’s consolidated total assets; (16) Subordinated Indebtedness of the Company or any Restricted Subsidiary in an aggregate principal amount not to exceed the greater of $35.0 million and 35% of Consolidated EBITDA for the Applicable Measurement Period; (17) Indebtedness to customers incurred in the ordinary course of business, including with respect to Obligations for deferred delivery of goods, services or interment rights, and Obligations for refunds of customer deposits and preneed payments pursuant to the terms of customer contracts or applicable law; (18) Indebtedness to Death Care Trusts incurred in the ordinary course of business, including Obligations to Death Care Trusts for the deposit of funds with respect to customer payments for preneed sales of goods, services or interment rights, Obligations to deposit funds with respect to perpetual care or endowed care cemeteries, and Obligations to maintain minimum Death Care Trust balances as required by the governing documents of Death Care Trusts or applicable law; (19) Indebtedness consisting of Indebtedness issued by the Company or any of its Restricted Subsidiaries to present, future or former directors, officers, employees and consultants of the Company or any of its Subsidiaries or their authorized representatives, in each case to finance the repurchase, redemption or other acquisition by the Company of Common Stock of the Company to the extent permitted by Section 4.07(b)(4); (20) Indebtedness of the Company or any of its Restricted Subsidiaries consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements in each case, incurred in the ordinary course of business; and (21) additional Indebtedness of the Company and the Restricted Subsidiaries in an aggregate principal amount at any time outstanding, including any Refinancing Indebtedness in respect thereof, not to exceed the greater of (A) $70.0 million and (B) 60% of Consolidated EBITDA for the Applicable Measurement Period. For purposes of determining any particular amount of Indebtedness under this Section 4.09, guarantees, Liens or letter of credit obligations supporting Indebtedness otherwise included in the determination of such particular amount shall not be included. For purposes of determining compliance with this Section 4.09, in the event that all or a portion of an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (21) of Section 4.09(b) or is permitted to be incurred pursuant to Section 4.09(a), the Company shall, in its sole discretion, divide, classify (or later reclassify) such item or portion of such item of Indebtedness in any manner that complies with this Section 4.09, including under Section 4.09(a) if such reclassified Indebtedness could then be incurred under such test, except that Indebtedness outstanding under the Credit Agreement on the Issue Date shall be deemed to have been incurred on the Issue Date under Section 4.09(b)(2) and may not be reclassified. Accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the payment of dividends on Disqualified Capital Stock in the form of additional shares of the same class of Disqualified Capital Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Capital Stock for purposes of this Section 4.09. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date (and, if such Indebtedness is not permitted to be incurred as of such date under this Section 4.09, the Company shall be in default of this Section 4.09). In the event that the Company or a Restricted Subsidiary (x) incurs Indebtedness to finance an acquisition or (y) assumes Indebtedness of Persons that are acquired by the Company or any Restricted Subsidiary or merged into, or consolidated, amalgamated or combined with, the Company or a Restricted Subsidiary in accordance with the terms of this Indenture, the date of determination of the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, shall, at the option of the Company, be the date that a definitive agreement for such acquisition is entered into and the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, shall be calculated giving pro forma effect to such acquisition and the other transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) consistent with the definition of the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, and, for the avoidance of doubt, (A) if any such ratios are exceeded as a result of fluctuations in such ratio (including due to fluctuations in the Consolidated Adjusted EBITDA of the Company or the target company) at or prior to the consummation of the relevant acquisition, such ratios will not be deemed to have been exceeded as a result of such fluctuations solely for purposes of determining whether such acquisition and any related transactions are permitted under this Indenture and (B) such ratios shall not be tested at the time of consummation of such acquisition or related transactions; provided that if the Company elects to have such determinations occur at the time of entry into such definitive agreement, (i) any such transaction shall be deemed to have occurred on the date the definitive agreement is entered into and to be outstanding thereafter for purposes of calculating any ratios under this Indenture after the date of such agreement and before the earlier of the date of consummation of such acquisition or the date such agreement is terminated or expires without consummation of such acquisition and (ii) to the extent any covenant baskets were utilized in satisfying any covenants, such baskets shall be deemed utilized, but any calculation of Consolidated EBITDA for purposes of other incurrences of Indebtedness or Liens or making of Restricted Payments (not related to such acquisition) shall not reflect such acquisition until it has been consummated. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt, and the amount of such debt will not be deemed to change as a result of fluctuations in currency exchange rates after such date of incurrence or commitment; provided, that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such Refinancing Indebtedness does not exceed (a) the principal amount of such Indebtedness being refinanced plus (b) the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums (including, without limitation, tender premiums) and other costs and expenses (including, without limitation, original issue discount, upfront fees or similar fees) incurred in connection with such refinancing. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or a Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Inde
Appears in 1 contract
Sources: Indenture (Carriage Services Inc)
Incurrence of Additional Indebtedness. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, acquire, become liable, contingently or otherwise, with respect to to, or otherwise become responsible for payment of (collectively, “incur”) any Indebtedness (including, without limitation, Acquired Indebtedness); provided, however, that, the Company and the Restricted Subsidiaries may incur Indebtedness (including, without limitation, Acquired Indebtedness) if on the date of the incurrence of such Indebtedness, after giving pro forma effect to the incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of the Company is at least 2.0 to 1.0; provided, further, that any Restricted Subsidiary of the Company that is not or will not, upon such incurrence, become a Guarantor may not incur Indebtedness under this paragraph if, after giving pro forma effect to such incurrence (including a pro forma application of the net proceeds therefrom), the more than an aggregate principal amount equal to $25.0 million of Indebtedness of such non-Guarantor Subsidiary would be outstanding under this paragraph at such time would exceed the greater of (A) $35.0 million or (B) 30% of Consolidated EBITDA for the Applicable Measurement Periodtime.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Indebtedness”):
(1) Indebtedness under the Notes issued on the Issue Date (including the related Note Guarantees);
(2) Indebtedness incurred pursuant to Credit Facilities in an aggregate principal amount at any time outstanding not to exceed the greater of (a) $275.0 million 1.05 billion and (b) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated Secured Debt Ratio would be no greater than 2.25 1.5 to 1.0; provided that, solely for purposes of determining the amount of Indebtedness that may be incurred under clause (2)(b), all Indebtedness incurred under this clause (2) shall be treated as Indebtedness secured by Liens (whether or not is it so secured);
(3) Indebtedness of the Company and its Restricted Subsidiaries outstanding on the Issue Date (other than Indebtedness under clause (1) and (2) of this Section 4.09(b)) (including any amendments or replacements thereof that do not increase the principal amount);
(4) Interest Swap Obligations of the Company or any of its Restricted SubsidiariesSubsidiaries covering Indebtedness of the Company or such Restricted Subsidiary; provided, however, that (a) such Interest Swap Obligations are entered into for the purpose of mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by the Company or such Restricted Subsidiary, or changes in the value of securities issued or held by the Company or such Restricted Subsidiary or held by Death Care TrustsSubsidiary, and in each case, not entered into for purposes of speculationspeculation or taking a “market view”;
(5) Indebtedness under Currency Agreements; provided that in the case of Currency Agreements which relate to Indebtedness, such Currency Agreements do not increase the Indebtedness of the Company and its Restricted Subsidiaries outstanding other than as a result of fluctuations in currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(6) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary of the Company owing to and held by the Company or any other Restricted Subsidiary of the Company; provided, however, that: (a) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other the Company or a Restricted Subsidiary of the Company, and (b) any sale or other transfer (excluding Permitted Liens) of any such Indebtedness to a Person other than the Company or a Restricted Subsidiary of the Company, shall be deemed, in each case, to be the incurrence of Indebtedness by the Company or such Restricted Subsidiary, as the case may be, not permitted by this clause (56);
(a) obligations pursuant to any cash management agreement and other Indebtedness in respect of netting services, overdraft protections and similar arrangements and (b) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business;
(7) 8) Indebtedness of the Company or any of its Restricted Subsidiaries represented by letters of credit, pledges or deposits for the account of the Company or such Restricted Subsidiary, as the case may be, in order to provide security for workers’ compensation claims, payment obligations in connection with health, disability or other employee benefits or property, casualty or life insurance or self-insurance, the purchase of goods or other requirements in the ordinary course of business;
(8) 9) Indebtedness represented by guarantees by the Company or its Restricted Subsidiaries of Indebtedness otherwise permitted to be incurred under this Indenture; provided that, in the case of a guarantee by a Restricted Subsidiary, such Restricted Subsidiary complies with Section 4.17 4.18 to the extent applicable;
(910) Indebtedness of the Company or any of its Restricted Subsidiaries in respect of bid, payment and performance bonds, bankers’ acceptances, workers’ compensation claims, surety or appeal bonds, payment obligations in connection with insurance or similar obligations, and bank overdrafts (and letters of credit in respect thereof) in the ordinary course of business;
(1011) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees, earn-outs, hold backs, incentives, non-competes, consulting, indemnities or obligations (contingent or other) in respect of purchase price adjustments or other indemnities in connection with the acquisition or disposition of assets or Capital Stockassets;
(1112) Indebtedness of (x) the Company or any Restricted Subsidiary incurred or issued to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged into or amalgamated or consolidated with the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger, amalgamation or consolidation, either: (a) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in Section 4.09(a)the first paragraph of this covenant; or (b) the Consolidated Fixed Charge Coverage Ratio of the Company and its Restricted Subsidiaries would not be lower than immediately prior to such acquisition, merger, amalgamation or consolidation; or (c) such Indebtedness constitutes Acquired Indebtedness; provided that, with respect to this clause (c), the only obligors with respect to such Acquired Indebtedness shall be those Persons who were obligors of such Acquired Indebtedness prior to such acquisition, merger, amalgamation or consolidation; provided, further, that any Restricted Subsidiary of the Company that is not or will not, upon such incurrence, become a Guarantor may not incur Indebtedness under clause (x) of this clause (1112) if, after giving pro forma effect to such incurrence (including a pro forma application of the net proceeds therefrom), the more than an aggregate principal amount equal to $75.0 million of Indebtedness of such non-Guarantor Subsidiary would be outstanding under clause (x) of this clause (1112) at such time would exceed the greater of (A) $35.0 million or (B) 35% of Consolidated EBITDA for the Applicable Measurement Periodtime;
(1213) Indebtedness represented by Capitalized Lease Obligations and Purchase Money Indebtedness of the Company and its Restricted Subsidiaries in an aggregate principal amount at any time outstanding, including any Refinancing Indebtedness in respect thereof, not to exceed the greater of (A) $35.0 75.0 million or and (B) 3530% of Consolidated EBITDA for the Applicable Measurement Period;
(1314) Indebtedness of International Restricted Subsidiaries (other than Canadian Restricted Subsidiaries) of the Company in connection with letters of credit and bank guarantees in an aggregate principal amount at any time outstanding not to exceed the greater of $25.0 million and 10% of Consolidated EBITDA for the Applicable Measurement Period;
(15) Indebtedness of the Company evidenced by commercial paper issued by the Company; provided that the aggregate outstanding principal amount of Indebtedness incurred pursuant to clause (2) of this Section 4.09(b) and this clause (1315) does not exceed the maximum amount of Indebtedness permitted under clause (2) of this Section 4.09(b);
(1416) Refinancing Indebtedness in respect of Indebtedness described in clauses (1), (3), (4), (10), (11), (125) and (1712) of this Section 4.09(b) and this clause (1416);
(1517) Indebtedness of any represented by Secured Foreign Subsidiary Credit Facilities in an aggregate principal amount at any time outstanding not to exceed the greater of $30.0 million or 10% of such Foreign Subsidiary’s consolidated total assets;
(16) Subordinated Indebtedness of the Company or any Restricted Subsidiary in an aggregate principal amount not to exceed the greater of $35.0 50.0 million and 3520% of Consolidated EBITDA for the Applicable Measurement Period;
(17) Indebtedness to customers incurred in the ordinary course of business, including with respect to Obligations for deferred delivery of goods, services or interment rights, and Obligations for refunds of customer deposits and preneed payments pursuant to the terms of customer contracts or applicable law;
(18) Indebtedness to Death Care Trusts incurred in the ordinary course of business, including Obligations to Death Care Trusts for the deposit of funds with respect to customer payments for preneed sales of goods, services or interment rights, Obligations to deposit funds with respect to perpetual care or endowed care cemeteries, and Obligations to maintain minimum Death Care Trust balances as required by the governing documents of Death Care Trusts or applicable law;
(19) Indebtedness consisting of Indebtedness issued by the Company or any of its Restricted Subsidiaries to present, future or former directors, officers, employees and consultants of the Company or any of its Subsidiaries or their authorized representatives, in each case to finance the repurchase, redemption or other acquisition by the Company of Common Stock of the Company to the extent permitted by Section 4.07(b)(4);
(20) Indebtedness of the Company or any of its Restricted Subsidiaries consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements in each case, incurred in the ordinary course of business; and
(2118) additional Indebtedness of the Company and the Restricted Subsidiaries in an aggregate principal amount at any time outstanding, including any Refinancing Indebtedness in respect thereof, not to exceed the greater of (A) $70.0 100.0 million and (B) 6040% of Consolidated EBITDA for the Applicable Measurement Period. For purposes of determining any particular amount of Indebtedness under this of this Section 4.09, guarantees, Liens or letter of credit obligations supporting Indebtedness otherwise included in the determination of such particular amount shall not be included. For purposes of determining compliance with this Section 4.09, in the event that all or a portion of an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (2118) of Section 4.09(b) or is permitted to be incurred pursuant to Section 4.09(a), the Company shall, in its sole discretion, divide, classify (or later reclassify) such item or portion of such item of Indebtedness in any manner that complies with this Section 4.09, including under Section 4.09(a) if such reclassified Indebtedness could then be incurred under such test, except that Indebtedness outstanding under the New Credit Agreement Facilities on the Issue Date or the Escrow Release Date shall be deemed to have been incurred on the Issue Date or the Escrow Release Date under Section 4.09(b)(2) and may not be reclassified. Accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the payment of dividends on Disqualified Capital Stock in the form of additional shares of the same class of Disqualified Capital Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Capital Stock for purposes of this Section 4.09. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date (and, if such Indebtedness is not permitted to be incurred as of such date under this Section 4.09, the Company shall be in default of this Section 4.09). In the event that the Company or a Restricted Subsidiary (x) incurs Indebtedness to finance an acquisition or (y) assumes Indebtedness of Persons that are acquired by the Company or any Restricted Subsidiary or merged into, or consolidated, amalgamated or combined with, the Company or a Restricted Subsidiary in accordance with the terms of this Indenture, the date of determination of the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, shall, at the option of the Company, be the date that a definitive agreement for such acquisition is entered into and the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, shall be calculated giving pro forma effect to such acquisition and the other transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) consistent with the definition of the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, and, for the avoidance of doubt, (A) if any such ratios are exceeded as a result of fluctuations in such ratio (including due to fluctuations in the Consolidated Adjusted EBITDA of the Company or the target company) at or prior to the consummation of the relevant acquisition, such ratios will not be deemed to have been exceeded as a result of such fluctuations solely for purposes of determining whether such acquisition and any related transactions are permitted under this Indenture and (B) such ratios shall not be tested at the time of consummation of such acquisition or related transactions; provided that if the Company elects to have such determinations occur at the time of entry into such definitive agreement, (i) any such transaction shall be deemed to have occurred on the date the definitive agreement is entered into and to be outstanding thereafter for purposes of calculating any ratios under this Indenture after the date of such agreement and before the earlier of the date of consummation of such acquisition or the date such agreement is terminated or expires without consummation of such acquisition and (ii) to the extent any covenant baskets were utilized in satisfying any covenants, such baskets shall be deemed utilized, but any calculation of Consolidated EBITDA for purposes of other incurrences of Indebtedness or Liens or making of Restricted Payments (not related to such acquisition) shall not reflect such acquisition until it has been consummated. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt, and the amount of such debt will not be deemed to change as a result of fluctuations in currency exchange rates after such date of incurrence or commitment; provided, that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such Refinancing refinancing Indebtedness does not exceed (a) the principal amount of such Indebtedness being refinanced plus (b) the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums (including, without limitation, tender premiums) and other costs and expenses (including, without limitation, original issue discount, upfront fees or similar fees) incurred in connection with such refinancing. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or a Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing IndeIndebtedness is denominated that is in effect on the date of such refinancing.
(c) The Company will not, and will not permit any Guarantor to, directly or indirectly, incur any Indebtedness which by its terms (or by the terms of any agreement governing such Indebtedness) is expressly subordinated in right of payment to any other Indebtedness of the Company or such Guarantor, as the case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate to the Notes or the applicable Note Guarantee, as the case may be, to the same extent and in the same manner as such Indebtedness is subordinated to other Indebtedness of the Company or such Guarantor, as the case may be. For purposes of the foregoing, no Indebtedness will be deemed to be subordinated in right of payment to any other Indebtedness of the Company or any Guarantor solely by virtue of such Indebtedness being unsecured or by virtue of the fact that the holders of such Indebtedness have entered into one or more intercreditor agreements giving one or more of such holders priority over the other holders in the collateral held by them.
Appears in 1 contract
Incurrence of Additional Indebtedness. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, acquire, become liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including, without limitation, Acquired Indebtedness); provided, however, that, the Company and the Restricted Subsidiaries may incur Indebtedness (including, without limitation, Acquired Indebtedness) if on the date of the incurrence of such Indebtedness, after giving pro forma effect to the incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of the Company is at least 2.0 to 1.0; provided, further, that any Restricted Subsidiary of the Company that is not or will not, upon such incurrence, become a Guarantor may not incur Indebtedness under this paragraph if, after giving pro forma effect to such incurrence (including a pro forma application of the net proceeds therefrom), the aggregate principal amount of Indebtedness of such non-Guarantor Subsidiary outstanding under this paragraph at such time would exceed the greater of (A) $35.0 25.0 million or (B) 30% of Consolidated EBITDA for the Applicable Measurement Period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Indebtedness”):
(1) Indebtedness under the Notes issued on the Issue Date (including the related Note Guarantees);
(2) Indebtedness incurred pursuant to Credit Facilities in an aggregate principal amount at any time outstanding not to exceed the greater of (a) $275.0 225.0 million and (b) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated Secured Debt Ratio would be no greater than 2.25 2.0 to 1.0; provided that, solely for purposes of determining the amount of Indebtedness that may be incurred under clause (2)(b), all Indebtedness incurred under this clause (2) shall be treated as Indebtedness secured by Liens (whether or not is it so secured);
(3) Indebtedness of the Company and its Restricted Subsidiaries outstanding on the Issue Date (other than Indebtedness under clause (1) and (2) of this Section 4.09(b)) (including any amendments or replacements thereof that do not increase the principal amount);
(4) Swap Obligations of the Company or any of its Restricted Subsidiaries; provided, however, that such Swap Obligations are entered into for the purpose of mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by the Company or such Restricted Subsidiary, or changes in the value of securities issued or held by the Company or such Restricted Subsidiary or held by Death Care Trusts, and in each case, not entered into for purposes of speculation;
(5) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary of the Company owing to and held by the Company or any other Restricted Subsidiary of the Company; provided, however, that: (a) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other the Company or a Restricted Subsidiary of the Company, and (b) any sale or other transfer (excluding Permitted Liens) of any such Indebtedness to a Person other than the Company or a Restricted Subsidiary of the Company, shall be deemed, in each case, to be the incurrence of Indebtedness by the Company or such Restricted Subsidiary, as the case may be, not permitted by this clause (5);
(a) obligations pursuant to any cash management agreement and other Indebtedness in respect of netting services, overdraft protections and similar arrangements and (b) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business;
(7) Indebtedness of the Company or any of its Restricted Subsidiaries represented by letters of credit, pledges or deposits for the account of the Company or such Restricted Subsidiary, as the case may be, in order to provide security for workers’ compensation claims, payment obligations in connection with health, disability or other employee benefits or property, casualty or life insurance or self-insurance, the purchase of goods or other requirements in the ordinary course of business;
(8) Indebtedness represented by guarantees by the Company or its Restricted Subsidiaries of Indebtedness otherwise permitted to be incurred under this Indenture; provided that, in the case of a guarantee by a Restricted Subsidiary, such Restricted Subsidiary complies with Section 4.17 to the extent applicable;
(9) Indebtedness of the Company or any of its Restricted Subsidiaries in respect of bid, payment and performance bonds, bankers’ acceptances, workers’ compensation claims, surety or appeal bonds, payment obligations in connection with insurance or similar obligations, and bank overdrafts (and letters of credit in respect thereof) in the ordinary course of business;
(10) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees, earn-outs, hold backs, incentives, non-competes, consulting, indemnities or obligations (contingent or other) in respect of purchase price adjustments or other indemnities in connection with the acquisition or disposition of assets or Capital Stock;
(11) Indebtedness of (x) the Company or any Restricted Subsidiary incurred or issued to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged into or amalgamated or consolidated with the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger, amalgamation or consolidation, either: (a) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in Section 4.09(a); or (b) the Consolidated Fixed Charge Coverage Ratio of the Company and its Restricted Subsidiaries would not be lower than immediately prior to such acquisition, merger, amalgamation or consolidation; provided, further, that any Restricted Subsidiary of the Company that is not or will not, upon such incurrence, become a Guarantor may not incur Indebtedness under clause (x) of this clause (11) if, after giving pro forma effect to such incurrence (including a pro forma application of the net proceeds therefrom), the aggregate principal amount of Indebtedness of such non-Guarantor Subsidiary outstanding under clause (x) of this clause (11) at such time would exceed the greater of (A) $35.0 A)$25.0 million or (B) 3530% of Consolidated EBITDA for the Applicable Measurement Period;
(12) Indebtedness represented by Capitalized Lease Obligations and Purchase Money Indebtedness of the Company and its Restricted Subsidiaries in an aggregate principal amount at any time outstanding, including any Refinancing Indebtedness in respect thereof, not to exceed the greater of (A) $35.0 25.0 million or (B) 3530% of Consolidated EBITDA for the Applicable Measurement Period;
(13) Indebtedness of the Company evidenced by commercial paper issued by the Company; provided that the aggregate outstanding principal amount of Indebtedness incurred pursuant to clause (2) of this Section 4.09(b) and this clause (13) does not exceed the maximum amount of Indebtedness permitted under clause (2) of this Section 4.09(b);
(14) Refinancing Indebtedness in respect of Indebtedness described in clauses (1), (3), (4), (10), (11), (12) and (17) of this Section 4.09(b) and this clause (14);
(15) Indebtedness of any Foreign Subsidiary in an aggregate principal amount at any time outstanding not to exceed the greater of $30.0 25.0 million or 10% of such Foreign Subsidiary’s consolidated total assets;
(16) Subordinated Indebtedness of the Company or any Restricted Subsidiary in an aggregate principal amount not to exceed the greater of $35.0 25.0 million and 3530% of Consolidated EBITDA for the Applicable Measurement Period;
(17) Indebtedness to customers incurred in the ordinary course of business, including with respect to Obligations for deferred delivery of goods, services or interment rights, and Obligations for refunds of customer deposits and preneed payments pursuant to the terms of customer contracts or applicable law;
(18) Indebtedness to Death Care Trusts incurred in the ordinary course of business, including Obligations to Death Care Trusts for the deposit of funds with respect to customer payments for preneed sales of goods, services or interment rights, Obligations to deposit funds with respect to perpetual care or endowed care cemeteries, and Obligations to maintain minimum Death Care Trust balances as required by the governing documents of Death Care Trusts or applicable law;
(19) Indebtedness consisting of Indebtedness issued by the Company or any of its Restricted Subsidiaries to present, future or former directors, officers, employees and consultants of the Company or any of its Subsidiaries or their authorized representatives, in each case to finance the repurchase, redemption or other acquisition by the Company of Common Stock of the Company to the extent permitted by Section 4.07(b)(4);
(20) Indebtedness of the Company or any of its Restricted Subsidiaries consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements in each case, incurred in the ordinary course of business; and
(2119) additional Indebtedness of the Company and the Restricted Subsidiaries in an aggregate principal amount at any time outstanding, including any Refinancing Indebtedness in respect thereof, not to exceed the greater of (A) $70.0 50.0 million and (B) 60% of Consolidated EBITDA for the Applicable Measurement Period. For purposes of determining any particular amount of Indebtedness under this of this Section 4.09, guarantees, Liens or letter of credit obligations supporting Indebtedness otherwise included in the determination of such particular amount shall not be included. For purposes of determining compliance with this Section 4.09, in the event that all or a portion of an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (2119) of Section 4.09(b) or is permitted to be incurred pursuant to Section 4.09(a), the Company shall, in its sole discretion, divide, classify (or later reclassify) such item or portion of such item of Indebtedness in any manner that complies with this Section 4.09, including under Section 4.09(a) if such reclassified Indebtedness could then be incurred under such test, except that Indebtedness outstanding under the Credit Agreement on the Issue Date shall be deemed to have been incurred on the Issue Date under Section 4.09(b)(2) and may not be reclassified. Accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the payment of dividends on Disqualified Capital Stock in the form of additional shares of the same class of Disqualified Capital Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Capital Stock for purposes of this Section 4.09. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date (and, if such Indebtedness is not permitted to be incurred as of such date under this Section 4.09, the Company shall be in default of this Section 4.09). In the event that the Company or a Restricted Subsidiary (x) incurs Indebtedness to finance an acquisition or (y) assumes Indebtedness of Persons that are acquired by the Company or any Restricted Subsidiary or merged into, or consolidated, amalgamated or combined with, the Company or a Restricted Subsidiary in accordance with the terms of this Indenture, the date of determination of the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, shall, at the option of the Company, be the date that a definitive agreement for such acquisition is entered into and the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, shall be calculated giving pro forma effect to such acquisition and the other transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) consistent with the definition of the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, and, for the avoidance of doubt, (A) if any such ratios are exceeded as a result of fluctuations in such ratio (including due to fluctuations in the Consolidated Adjusted EBITDA of the Company or the target company) at or prior to the consummation of the relevant acquisition, such ratios will not be deemed to have been exceeded as a result of such fluctuations solely for purposes of determining whether such acquisition and any related transactions are permitted under this Indenture and (B) such ratios shall not be tested at the time of consummation of such acquisition or related transactions; provided that if the Company elects to have such determinations occur at the time of entry into such definitive agreement, (i) any such transaction shall be deemed to have occurred on the date the definitive agreement is entered into and to be outstanding thereafter for purposes of calculating any ratios under this Indenture after the date of such agreement and before the earlier of the date of consummation of such acquisition or the date such agreement is terminated or expires without consummation of such acquisition and (ii) to the extent any covenant baskets were utilized in satisfying any covenants, such baskets shall be deemed utilized, but any calculation of Consolidated EBITDA for purposes of other incurrences of Indebtedness or Liens or making of Restricted Payments (not related to such acquisition) shall not reflect such acquisition until it has been consummated. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt, and the amount of such debt will not be deemed to change as a result of fluctuations in currency exchange rates after such date of incurrence or commitment; provided, that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such Refinancing Indebtedness does not exceed (a) the principal amount of such Indebtedness being refinanced plus (b) the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums (including, without limitation, tender premiums) and other costs and expenses (including, without limitation, original issue discount, upfront fees or similar fees) incurred in connection with such refinancing. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or a Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing IndeIndebtedness is denominated that is in effect on the date of such refinancing.
(c) The Company will not, and will not permit any Guarantor to, directly or indirectly, incur any Indebtedness which by its terms (or by the terms of any agreement governing such Indebtedness) is expressly subordinated in right of payment to any other Indebtedness of the Company or such Guarantor, as the case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate to the Notes or the applicable Note Guarantee, as the case may be, to the same extent and in the same manner as such Indebtedness is subo
Appears in 1 contract
Sources: Indenture (Carriage Services Inc)
Incurrence of Additional Indebtedness. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, acquire, become liable, contingently or otherwise, with respect to to, or otherwise become responsible for payment of (collectively, “incur”) any Indebtedness (including, without limitation, Acquired Indebtedness); provided, however, that, so long as no Default or Event of Default shall have occurred and be continuing at the time or as a consequence of the incurrence of any such Indebtedness, the Company and the Restricted Subsidiaries may incur Indebtedness (including, without limitation, Acquired Indebtedness) if on the date of the incurrence of such Indebtedness, after giving pro forma effect to the incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of the Company is at least 2.0 to 1.0; provided, further, that any Restricted Subsidiary of the Company that is not or will not, upon such incurrence, become a Guarantor may not incur Indebtedness under this paragraph if, after giving pro forma effect to such incurrence (including a pro forma application of the net proceeds therefrom), the more than an aggregate principal amount equal to $60.0 million of Indebtedness of all such non-Guarantor Subsidiary Restricted Subsidiaries would be outstanding under this paragraph at such time would exceed the greater of (A) $35.0 million or (B) 30% of Consolidated EBITDA for the Applicable Measurement Periodtime.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness Indebtedness, without duplication (collectively, “Permitted Indebtedness”):
(1) Indebtedness under the Notes issued on the Issue Date (including the related Note Guarantees)) and the Exchange Notes and related exchange guarantees to be issued in exchange for the Notes and the Note Guarantees thereof pursuant to the Registration Rights Agreement;
(2) Indebtedness incurred pursuant to Credit Facilities in an aggregate principal amount at any time outstanding not to exceed the greater of (a) $275.0 450 million and (b) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated Secured Debt Ratio would be no greater than 2.25 1.75 to 1.0; provided that, solely for purposes of determining the amount of Indebtedness that may be incurred under clause (2)(b), all Indebtedness incurred under this clause (2) shall be treated as Indebtedness secured by Liens (whether or not it is it so secured);
(3) Indebtedness of the Company and its Restricted Subsidiaries outstanding on the Issue Date (other than Indebtedness under clause (1) and (2) of this Section 4.09(b)) (including any amendments or replacements thereof that do not increase the principal amount);
(4) Interest Swap Obligations of the Company or any of its Restricted SubsidiariesSubsidiaries covering Indebtedness of the Company or such Restricted Subsidiary; provided, however, that such Interest Swap Obligations are entered into for the purpose of mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by the Company or such Restricted Subsidiary, or changes in the value of securities issued or held by the Company or such Restricted Subsidiary or held by Death Care TrustsSubsidiary, and in each case, not entered into for purposes of speculationspeculation or taking a “market view”;
(5) Indebtedness under Currency Agreements; provided that in the case of Currency Agreements which relate to Indebtedness, such Currency Agreements do not increase the Indebtedness of the Company and its Restricted Subsidiaries outstanding other than as a result of fluctuations in currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(6) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary of the Company owing to and held by the Company or any other Restricted Subsidiary of the Company; provided, however, that: (a) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other the Company or a Restricted Subsidiary of the Company, and (b) any sale or other transfer (excluding Permitted Liens) of any such Indebtedness to a Person other than the Company or a Restricted Subsidiary of the Company, shall be deemed, in each case, to be the incurrence of Indebtedness by the Company or such Restricted Subsidiary, as the case may be, not permitted by this clause (56);
(a) obligations pursuant to any cash management agreement and other Indebtedness in respect of netting services, overdraft protections and similar arrangements and (b) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business;
(7) 8) Indebtedness of the Company or any of its Restricted Subsidiaries represented by letters of credit, pledges or deposits for the account of the Company or such Restricted Subsidiary, and obligations owed to customers for advance payments, as the case may be, in order to provide security for workers’ compensation claims, payment obligations in connection with health, disability or other employee benefits or property, casualty or life insurance or self-insurance, the purchase of goods or other requirements in the ordinary course of business;
(8) 9) Indebtedness represented by guarantees by the Company or its Restricted Subsidiaries of Indebtedness otherwise permitted to be incurred under this Indenture; provided that, in the case of a guarantee by a Restricted Subsidiary, such Restricted Subsidiary complies with Section 4.17 4.18 to the extent applicable;
(910) Indebtedness of the Company or any of its Restricted Subsidiaries in respect of bid, payment and performance bonds, bankers’ acceptances, workers’ compensation claims, surety or appeal bonds, payment obligations in connection with insurance or similar obligations, and bank overdrafts (and letters of credit in respect thereof) in the ordinary course of business;
(1011) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees, earn-outs, hold backs, incentives, non-competes, consulting, indemnities or obligations (contingent or other) in respect of purchase price adjustments or other indemnities in connection with the acquisition or disposition of assets or Capital Stockassets;
(1112) Indebtedness of (x) the Company or any Restricted Subsidiary incurred or issued to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged into or amalgamated or consolidated with the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger, amalgamation merger or consolidation, either: (a) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in Section 4.09(a)the first paragraph of this covenant; or (b) the Consolidated Fixed Charge Coverage Ratio of the Company and its Restricted Subsidiaries would not be lower than immediately prior to such acquisition, mergermerger or consolidation; or (c) such Indebtedness constitutes Acquired Indebtedness; provided that, amalgamation with respect to this clause (c), the only obligors with respect to such Acquired Indebtedness shall be those Persons who were obligors of such Acquired Indebtedness prior to such acquisition, merger or consolidation; provided, further, that any Restricted Subsidiary of the Company that is not or will not, upon such incurrence, become a Guarantor may not incur Indebtedness under clause (x) of this clause (1112) if, after giving pro forma effect to such incurrence (including a pro forma application of the net proceeds therefrom), the more than an aggregate principal amount equal to $60.0 million of Indebtedness of all such non-Guarantor Subsidiary Restricted Subsidiaries would be outstanding under clause (x) of this clause (1112) at such time would exceed the greater of (A) $35.0 million or (B) 35% of Consolidated EBITDA for the Applicable Measurement Periodtime;
(1213) Indebtedness represented by Capitalized Lease Obligations and Purchase Money Indebtedness of the Company and its Restricted Subsidiaries in an aggregate principal amount at any time outstanding, including any Refinancing Indebtedness in respect thereof, not to exceed (A) the greater of (Ai) $35.0 30.0 million or and (ii) 4.0% of Consolidated Total Assets plus (B) 35% $45.0 million to finance the acquisition and/or construction of Consolidated EBITDA a new headquarters facility for the Applicable Measurement PeriodCompany;
(1314) Indebtedness of Foreign Restricted Subsidiaries of the Company in connection with letters of credit and bank guarantees in an aggregate principal amount at any time outstanding not to exceed $50.0 million;
(15) Indebtedness of the Company evidenced by commercial paper issued by the Company; provided that the aggregate outstanding principal amount of Indebtedness incurred pursuant to clause (2) of this Section 4.09(b) and this clause (1315) does not exceed the maximum amount of Indebtedness permitted under clause (2) of this Section 4.09(b);
(1416) Refinancing Indebtedness in respect of Indebtedness described in clauses (1), (3), (4), (10), (11), (125) and (1712) of this Section 4.09(b) and this clause (1416);
(15) Indebtedness of any Foreign Subsidiary in an aggregate principal amount at any time outstanding not to exceed the greater of $30.0 million or 10% of such Foreign Subsidiary’s consolidated total assets;
(16) Subordinated Indebtedness of the Company or any Restricted Subsidiary in an aggregate principal amount not to exceed the greater of $35.0 million and 35% of Consolidated EBITDA for the Applicable Measurement Period;
(17) Indebtedness to customers incurred in the ordinary course of business, including with respect to Obligations for deferred delivery of goods, services or interment rights, and Obligations for refunds of customer deposits and preneed payments pursuant to the terms of customer contracts or applicable law;
(18) Indebtedness to Death Care Trusts incurred in the ordinary course of business, including Obligations to Death Care Trusts for the deposit of funds with respect to customer payments for preneed sales of goods, services or interment rights, Obligations to deposit funds with respect to perpetual care or endowed care cemeteries, and Obligations to maintain minimum Death Care Trust balances as required by the governing documents of Death Care Trusts or applicable law;
(19) Indebtedness consisting of Indebtedness issued by the Company or any of its Restricted Subsidiaries to present, future or former directors, officers, employees and consultants of the Company or any of its Subsidiaries or their authorized representatives, in each case to finance the repurchase, redemption or other acquisition by the Company of Common Stock of the Company to the extent permitted by Section 4.07(b)(4);
(20) Indebtedness of the Company or any of its Restricted Subsidiaries consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements in each case, incurred in the ordinary course of business; and
(2117) additional Indebtedness of the Company and the Restricted Subsidiaries in an aggregate principal amount at any time outstanding, including any Refinancing Indebtedness in respect thereof, not to exceed the greater of (A) $70.0 100.0 million and (B) 6010.0% of Consolidated EBITDA for the Applicable Measurement PeriodTotal Assets. For purposes of determining any particular amount of Indebtedness under this of this Section 4.09, guarantees, Liens or letter of credit obligations supporting Indebtedness otherwise included in the determination of such particular amount shall not be included. For purposes of determining compliance with this Section 4.09, in the event that all or a portion of an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (2117) of Section 4.09(b) or is permitted to be incurred pursuant to Section 4.09(a), the Company shall, in its sole discretion, divide, classify (or later reclassify) such item or portion of such item of Indebtedness in any manner that complies with this Section 4.09, including under Section 4.09(a) if such reclassified Indebtedness could then be incurred under such test, except that Indebtedness outstanding under the Existing Credit Agreement Facilities on the Issue Date shall be deemed to have been incurred on the Issue Date under Section 4.09(b)(2) and may not be reclassified. Accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the payment of dividends on Disqualified Capital Stock in the form of additional shares of the same class of Disqualified Capital Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Capital Stock for purposes of this Section 4.09. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date (and, if such Indebtedness is not permitted to be incurred as of such date under this Section 4.09, the Company shall be in default of this Section 4.09). In the event that the Company or a Restricted Subsidiary (x) incurs Indebtedness to finance an acquisition or (y) assumes Indebtedness of Persons that are acquired by the Company or any Restricted Subsidiary or merged into, or consolidated, amalgamated or combined with, the Company or a Restricted Subsidiary in accordance with the terms of this Indenture, the date of determination of the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, shall, at the option of the Company, be the date that a definitive agreement for such acquisition is entered into and the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, shall be calculated giving pro forma effect to such acquisition and the other transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) consistent with the definition of the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, and, for the avoidance of doubt, (A) if any such ratios are exceeded as a result of fluctuations in such ratio (including due to fluctuations in the Consolidated Adjusted EBITDA of the Company or the target company) at or prior to the consummation of the relevant acquisition, such ratios will not be deemed to have been exceeded as a result of such fluctuations solely for purposes of determining whether such acquisition and any related transactions are permitted under this Indenture and (B) such ratios shall not be tested at the time of consummation of such acquisition or related transactions; provided that if the Company elects to have such determinations occur at the time of entry into such definitive agreement, (i) any such transaction shall be deemed to have occurred on the date the definitive agreement is entered into and to be outstanding thereafter for purposes of calculating any ratios under this Indenture after the date of such agreement and before the earlier of the date of consummation of such acquisition or the date such agreement is terminated or expires without consummation of such acquisition and (ii) to the extent any covenant baskets were utilized in satisfying any covenants, such baskets shall be deemed utilized, but any calculation of Consolidated EBITDA for purposes of other incurrences of Indebtedness or Liens or making of Restricted Payments (not related to such acquisition) shall not reflect such acquisition until it has been consummated. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt, and the amount of such debt will not be deemed to change as a result of fluctuations in currency exchange rates after such date of incurrence or commitment; provided, that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such Refinancing refinancing Indebtedness does not exceed (a) the principal amount of such Indebtedness being refinanced plus (b) the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums (including, without limitation, tender premiums) and other costs and expenses (including, without limitation, original issue discount, upfront fees or similar fees) incurred in connection with such refinancing. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or a Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing IndeIndebtedness is denominated that is in effect on the date of such refinancing.
(c) The Company will not, and will not permit any Guarantor to, directly or indirectly, incur any Indebtedness which by its terms (or by the terms of any agreement governing such Indebtedness) is expressly subordinated in right of payment to any other Indebtedness of the Company or such Guarantor, as the case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate to the Notes or the applicable Note Guarantee, as the case may be, to the same extent and in the same manner as such Indebtedness is subordinated to other Indebtedness of the Company or such Guarantor, as the case may be. For purposes of the foregoing, no Indebtedness will be deemed to be subordinated in right of payment to any other Indebtedness of the Company or any Guarantor solely by virtue of such Indebtedness being unsecured or by virtue of the fact that the holders of such Indebtedness have entered into one or more intercreditor agreements giving one or more of such holders priority over the other holders in the collateral held by them.
Appears in 1 contract
Sources: Indenture (Tennant Co)
Incurrence of Additional Indebtedness. (a) The Company will not, and will not permit any of its Restricted Subsidiaries toto Incur any Indebtedness, directly except that on or indirectly, create, incur, assume, guarantee, acquire, become liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including, without limitation, Acquired Indebtedness); provided, however, thatafter the date that is the three year anniversary of the Issue Date, the Company and the Restricted Subsidiaries any Subsidiary Guarantor may incur Incur Indebtedness (including, without limitation, Acquired Indebtedness) if on the date of the incurrence of such Indebtedness, immediately after giving pro forma effect to the incurrence thereof, Incurrence thereof and the Consolidated Fixed Charge Coverage Ratio of the Company is at least 2.0 to 1.0; provided, further, that any Restricted Subsidiary of the Company that is not or will not, upon such incurrence, become a Guarantor may not incur Indebtedness under this paragraph if, after giving pro forma effect to such incurrence (including a pro forma application of the net proceeds therefrom), the aggregate principal amount of Indebtedness of such non-Guarantor Subsidiary outstanding under this paragraph at such time would exceed the greater of (A) $35.0 million Company’s Consolidated Net Leverage Ratio is equal to or (B) 30% of Consolidated EBITDA for the Applicable Measurement Periodless than 3.00 to 1.00.
(b) The provisions Notwithstanding clause (a) above, the Company and its Restricted Subsidiaries (other than (i) Arazi Holdco 1 and Lancaster Holdco 1 and any of their respective Subsidiaries and (ii) Olinda Star and any of its respective Subsidiaries unless and until Olinda Star has (x) provided a valid and binding Note Guarantee as described in Section 4.09(a10.05(a) hereof will not prohibit and (y) delivered the incurrence of any of valid and perfected Liens and other documents described in Section 4.19 hereof, including the related Springing Security Documents, as applicable) may Incur the following items of Indebtedness (collectively, “Permitted Indebtedness”):
(1) Indebtedness under in respect of the Notes Securities issued on the Issue Date (including Date, plus any PIK Securities issued in accordance with Section 2.13, less the related amounts paid in accordance with Section 4.01 and, in each case, and the Note Guarantees)Guarantees associated thereto;
(2) Indebtedness incurred pursuant to Credit Facilities in an aggregate principal amount at any time outstanding not to exceed the greater of (a) $275.0 million and (b) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated Secured Debt Ratio would be no greater than 2.25 to 1.0; provided that, solely for purposes of determining the amount of Indebtedness that may be incurred under clause (2)(b), all Indebtedness incurred under this clause (2) shall be treated as Indebtedness secured by Liens (whether or not is it so secured);
(3) Indebtedness of the Company and its Restricted Subsidiaries outstanding on the Issue Date (other than Indebtedness under clause described in clauses (1) and (217) hereof) and which, solely with respect to Indebtedness to one of more third-parties for borrowed money, is as set forth on Schedule 4.09 hereof;
(3) Guarantees by any Subsidiary Guarantor of Indebtedness of the Company or any Subsidiary Guarantor permitted under this Section 4.09(bIndenture (other than any Indebtedness under an ALB Credit Facility)) (including ; provided, that if any amendments such Guarantee is of Subordinated Indebtedness, then the Guarantee of such Subordinated Indebtedness shall be subordinated to the Securities or replacements thereof that do not increase the principal amount)Note Guarantees, as applicable;
(4) Swap Hedging Obligations of entered into by the Company and its Restricted Subsidiaries not for speculative purposes;
(5) intercompany Indebtedness between the Company and any Restricted Subsidiary or between any Restricted Subsidiaries; provided that:
(A) if the Company or any Subsidiary Guarantor is the Obligor and the obligee is (i) a Restricted Subsidiary that is not a Subsidiary Guarantor or (ii) an ALB Entity, such Indebtedness must be (x) unsecured and (y) expressly subordinated to the prior payment in full of its Restricted Subsidiariesall obligations under the Securities or the Note Guarantees, as applicable, and the Indenture; provided, however, that such Swap Obligations are entered into for the purpose of mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by the Company or such Restricted Subsidiary, or changes and
(B) in the value of securities issued or event that at any time any such Indebtedness ceases to be held by the Company or such Restricted Subsidiary or held by Death Care Trusts, and in each case, not entered into for purposes of speculation;
(5) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary of the Company owing Subsidiary, such Indebtedness shall be deemed to and held be Incurred by the Company or any other Restricted Subsidiary of the Company; provided, however, that: (a) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other the Company or a Restricted Subsidiary of the Company, and (b) any sale or other transfer (excluding Permitted Liens) of any such Indebtedness to a Person other than the Company or a Restricted Subsidiary of the Company, shall be deemed, in each case, to be the incurrence of Indebtedness by the Company or such applicable Restricted Subsidiary, as the case may be, and not permitted by this clause (5)) at the time such event occurs;
(a) obligations pursuant to any cash management agreement and other Indebtedness in respect of netting services, overdraft protections and similar arrangements and (b6) Indebtedness of the Company or any of its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of businessbusiness (including daylight overdrafts paid in full by the close of business on the day such overdraft was Incurred); provided, that such Indebtedness is extinguished within five Business Days of Incurrence;
(7) Indebtedness of the Company or any of its Restricted Subsidiaries represented by letters of credit, pledges or deposits for the account of the Company or such Restricted Subsidiary, as the case may be, in order to provide security for workers’ compensation claims, payment obligations in connection with health, disability or other employee benefits or property, casualty or life insurance or self-insurance, the purchase of goods or other requirements in the ordinary course of business;
(8) Indebtedness represented by guarantees by the Company or its Restricted Subsidiaries of Indebtedness otherwise permitted to be incurred under this Indenture; provided that, in the case of a guarantee by a Restricted Subsidiary, such Restricted Subsidiary complies with Section 4.17 to the extent applicable;
(9) Indebtedness of the Company or any of its Restricted Subsidiaries in respect of bid, payment and performance bonds, bankers’ acceptances, workers’ compensation claims, bid, surety or appeal bonds, payment obligations in connection with with, insurance premiums or similar obligations, security deposits and bank overdrafts (and letters of credit in connection with, in lieu of or in respect thereofof each of the foregoing);
(8) Refinancing Indebtedness in respect of:
(A) Indebtedness Incurred pursuant to clause (a) above; or
(B) Indebtedness Incurred pursuant to (x) clause (1), (2), (8), (15) and (17) hereof (y) and, solely following the FPSO Disposition Date, clause (14) hereof; provided, that any Refinancing Indebtedness Incurred under this Section 4.09(b)(8) shall not be secured by any Liens other than Liens on the property or assets already securing the Indebtedness being Refinanced hereunder, and any such new Liens and such Refinancing Indebtedness shall be subject to the same proportionate Lien priorities as set forth in this Indenture and the Intercreditor Agreement at the time of such Refinancing;
(9) Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any Restricted Subsidiary pursuant to such agreements, in any case Incurred in connection with the disposition of any business, assets or Subsidiary (other than Guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition), so long as the amount does not exceed the gross proceeds (including non-cash proceeds) actually received by the Company or any Restricted Subsidiary thereof in connection with such disposition;
(10) Indebtedness constituting reimbursement obligations in respect of trade or performance letters of credit entered into in the ordinary course of business;
(1011) [reserved];
(12) Indebtedness to the extent that the net proceeds thereof are promptly deposited to defease or to satisfy and discharge all of the Securities in accordance with this Indenture;
(13) Indebtedness of the Company or any Restricted Subsidiary consisting Incurred through the provision of bonds, guarantees, earn-outs, hold backs, incentives, non-competes, consulting, indemnities letters of credit or obligations (contingent similar instruments required by any maritime commission or other) in respect of purchase price adjustments authority or other indemnities governmental or regulatory agencies, including, without limitation, customs authorities; in connection with each case, for vessels owned or chartered by, and in the acquisition ordinary course of business of, the Company or disposition any of assets its Restricted Subsidiaries at any time outstanding not to exceed the amount required by such governmental or Capital Stockregulatory authority;
(1114) Indebtedness of (x) the Company or any Restricted Subsidiary incurred Incurred to make Capital Expenditures on Collateral (including any maintenance, upgrade or issued overhaul, but excluding any acquisition of Drilling Rigs) not to finance exceed $50.0 million; provided that the amount available under this clause (14) shall be increased in an acquisition amount equal to 100.0% of the Net Cash Proceeds received by the Company since immediately after the Issue Date from the issue or (y) Persons that are acquired by sale of Equity Interests of the Company or cash contributed to the capital of the Company or any Restricted Subsidiary (in each case, other than proceeds of Disqualified Capital Stock or merged into or amalgamated or consolidated with sales of Equity Interests to the Company or a Restricted Subsidiary in accordance with the terms any of this Indenture; provided that after giving effect to such acquisition, merger, amalgamation or consolidation, either: (a) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in Section 4.09(aits Subsidiaries); or (b) the Consolidated Fixed Charge Coverage Ratio of the Company and its Restricted Subsidiaries would not be lower than immediately prior to such acquisition, merger, amalgamation or consolidation; provided, further, that any Restricted Subsidiary of the Company that is not or will not, upon such incurrence, become a Guarantor may not incur Indebtedness under clause (x) of this clause (11) if, after giving pro forma effect to such incurrence (including a pro forma application of the net proceeds therefrom), the aggregate principal amount of Indebtedness of such non-Guarantor Subsidiary outstanding under clause (x) of this clause (11) at such time would exceed the greater of (A) $35.0 million or (B) 35% of Consolidated EBITDA for the Applicable Measurement Period;
(12) Indebtedness represented by Capitalized Lease Obligations and Purchase Money Indebtedness of the Company and its Restricted Subsidiaries in an aggregate principal amount at any time outstanding, including any Refinancing Indebtedness in respect thereof, not to exceed the greater of (A) $35.0 million or (B) 35% of Consolidated EBITDA for the Applicable Measurement Period;
(13) 10.0 million; provided, further that any Indebtedness of the Company evidenced by commercial paper issued by the Company; provided that the aggregate outstanding principal amount of Indebtedness incurred Incurred pursuant to clause (2) of this Section 4.09(b) and this clause (13) does not exceed the maximum amount of Indebtedness permitted under clause (2) of this Section 4.09(b);
(14) Refinancing Indebtedness in respect of Indebtedness described in clauses (1), (3), (4), (10), (11), (12) and (17) of this Section 4.09(b) and this clause (14)) for the purpose of any upgrade on a Drilling Rig constituting Collateral shall only be Incurred if required by an Encumbered Charter Agreement or to maintain classification of such Drilling Rig;
(15) Indebtedness of any Foreign Subsidiary in ALB Entity Incurred to make Capital Expenditures on assets owned by an aggregate principal amount ALB Entity (including any maintenance, upgrade or overhaul, but excluding any acquisition of Drilling Rigs) at any the time outstanding of such Incurrence, not to exceed the greater of $30.0 million or 10% of such Foreign Subsidiary’s consolidated total assetsU.S.$100.0 million;
(16) Subordinated Indebtedness of the Company or any Restricted Subsidiary in an aggregate principal amount Subsidiary, Incurred for general corporate purposes not to exceed the greater of $35.0 million and 35% of Consolidated EBITDA for the Applicable Measurement Period;U.S.$5.0 million; and
(17) Indebtedness to customers incurred in the ordinary course of business, including with respect to Obligations for deferred delivery of goods, services or interment rights, and Obligations for refunds of customer deposits and preneed payments pursuant to the terms of customer contracts or applicable law;
(18) Indebtedness to Death Care Trusts incurred in the ordinary course of business, including Obligations to Death Care Trusts for the deposit of funds with respect to customer payments for preneed sales of goods, services or interment rights, Obligations to deposit funds with respect to perpetual care or endowed care cemeteries, and Obligations to maintain minimum Death Care Trust balances as required by the governing documents of Death Care Trusts or applicable law;
(19) Indebtedness consisting of Indebtedness issued by the Company or any of its Restricted Subsidiaries to present, future or former directors, officers, employees and consultants of the Company or any of its Subsidiaries or their authorized representatives, in each case to finance the repurchase, redemption or other acquisition by the Company of Common Stock of the Company to the extent permitted by Section 4.07(b)(4);
(20) Indebtedness of the Company or any of its Restricted Subsidiaries consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements in each case, incurred in the ordinary course of business; and
(21) additional Indebtedness of the Company and any Subsidiary Guarantor under the Restricted Subsidiaries in an aggregate principal amount at any time outstanding, including any Refinancing Indebtedness in respect thereofWorking Capital Facility, not to exceed the greater sum of (Ai) $70.0 U.S.$160.0 million and less (Bii) 60% any payment in cash (other than in connection with a Refinancing of Consolidated EBITDA for such Working Capital Facility) by the Applicable Measurement Period. For purposes of determining any particular Company after the Issue Date that reduces the aggregate outstanding principal amount of such Working Capital Facility.
(c) The Company will not and will not cause or permit any Subsidiary Guarantor to Incur any Indebtedness under this Section 4.09, guarantees, that is subordinated (either in respect of Liens or letter right of credit obligations supporting payment or any combination thereof) to any other Indebtedness, unless such Indebtedness otherwise included is expressly subordinated (either in respect of Liens or right of payment or any combination thereof) to the determination Securities and the applicable Note Guarantee to the same extent and on the same terms as such Indebtedness is subordinate to such other Indebtedness; provided, however, that no Indebtedness will be deemed to be subordinated (either in respect of such particular amount shall not be included. Liens or right of payment or any combination thereof) to any other Indebtedness solely by virtue of being unsecured or by virtue of being secured by different collateral.
(d) For purposes of determining compliance with, and the outstanding principal amount of, any particular Indebtedness Incurred pursuant to and in compliance with this Section 4.09, :
(1) the outstanding principal amount of any item of Indebtedness will be counted only once (without duplication for guarantees or otherwise);
(2) in the event that all or a portion of an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (2117) of Section 4.09(b) or is permitted to be incurred pursuant to Section 4.09(aabove (excluding clause (14)), the Company shallmay, in its sole discretion, divide, divide and classify (or later at any time reclassify) such item or portion of such item of Indebtedness in any manner that complies with this Section 4.09, including under Section 4.09(a;
(3) if such reclassified the amount of Indebtedness could then be incurred under such test, except that Indebtedness outstanding under the Credit Agreement Incurred by a Person on the Issue Date Incurrence date thereof shall be deemed to have been incurred equal the amount recognized as a liability on the Issue Date under Section 4.09(b)(2) balance sheet of such Person in accordance with IFRS and may not the amount of Indebtedness issued at a price that is less than the principal amount thereof will be reclassifiedequal to the amount of liability in respect thereof determined in accordance with IFRS. Accrual of interest, the accretion or amortization of original issue discount, the payment of regularly scheduled interest on any Indebtedness in the form of additional Indebtedness with of the same terms, instrument or the payment of regularly scheduled dividends on Disqualified Capital Stock in the form of additional shares of the same class of Disqualified Capital Stock with the same terms will not be deemed to be an incurrence Incurrence of Indebtedness or an issuance of Disqualified Capital Stock for purposes of this Section 4.09. If at ; provided that any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, such outstanding additional Indebtedness or Disqualified Capital Stock paid in respect of Indebtedness Incurred pursuant to any Indebtedness provision of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date clauses (and, if such Indebtedness is not permitted to be incurred as of such date under this Section 4.09, the Company shall be in default a) or (b) of this Section 4.09). In the event that the Company or a Restricted Subsidiary (x) incurs 4.09 will be counted as Indebtedness to finance an acquisition or (y) assumes Indebtedness of Persons that are acquired by the Company or any Restricted Subsidiary or merged into, or consolidated, amalgamated or combined with, the Company or a Restricted Subsidiary in accordance with the terms of this Indenture, the date of determination of the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, shall, at the option of the Company, be the date that a definitive agreement for such acquisition is entered into and the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, shall be calculated giving pro forma effect to such acquisition and the other transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) consistent with the definition of the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, and, for the avoidance of doubt, (A) if any such ratios are exceeded as a result of fluctuations in such ratio (including due to fluctuations in the Consolidated Adjusted EBITDA of the Company or the target company) at or prior to the consummation of the relevant acquisition, such ratios will not be deemed to have been exceeded as a result of such fluctuations solely outstanding for purposes of determining whether such acquisition and any related transactions are permitted future Incurrence under this Indenture and Section 4.09(a); and
(B4) such ratios shall not be tested at the time of consummation of such acquisition or related transactions; provided that if the Company elects with respect to have such determinations occur at the time of entry into such definitive agreement, (i) any such transaction shall be deemed to have occurred on the date the definitive agreement is entered into and to be outstanding thereafter for purposes of calculating any ratios under this Indenture after the date of such agreement and before the earlier of the date of consummation of such acquisition or the date such agreement is terminated or expires without consummation of such acquisition and (ii) to the extent any covenant baskets were utilized in satisfying any covenants, such baskets shall be deemed utilized, but any calculation of Consolidated EBITDA for purposes of other incurrences of Indebtedness or Liens or making of Restricted Payments (not related to such acquisition) shall not reflect such acquisition until it has been consummated. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurredIncurred, in the case of term debtIndebtedness, or first committed, in the case of revolving credit debt, and the amount of such debt will not be deemed to change as a result of fluctuations in currency exchange rates after such date of incurrence or commitmentIndebtedness; provided, that if such Indebtedness is incurred Incurred to refinance Refinance other Indebtedness denominated in a foreign currency, and such refinancing Refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancingRefinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such Refinancing Indebtedness does not exceed (a) the principal amount of such Indebtedness being refinanced plus (b) the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums (including, without limitation, tender premiums) and other costs and expenses (including, without limitation, original issue discount, upfront fees or similar fees) incurred in connection with such refinancingRefinanced. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or a Restricted Subsidiary may incur Incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness incurred Incurred to refinance Refinance other Indebtedness, if incurred Incurred in a different currency from the Indebtedness being refinancedRefinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing IndeIndebtedness is denominated that is in effect on the date of such Refinancing.
Appears in 1 contract
Sources: Indenture (Arazi S.a r.l.)
Incurrence of Additional Indebtedness.
(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly Incur any Indebtedness, except that on or indirectly, create, incur, assume, guarantee, acquire, become liable, contingently or otherwise, with respect to after the date that is the three (collectively, “incur”3) any Indebtedness (including, without limitation, Acquired Indebtedness); provided, however, thatyear anniversary of the Issue Date, the Company and the Restricted Subsidiaries any Subsidiary Guarantor may incur Incur unsecured Indebtedness (including, without limitation, Acquired Indebtedness) if on the date of the incurrence of such Indebtedness, immediately after giving pro forma effect to the incurrence thereof, Incurrence thereof and the Consolidated Fixed Charge Coverage Ratio of the Company is at least 2.0 to 1.0; provided, further, that any Restricted Subsidiary of the Company that is not or will not, upon such incurrence, become a Guarantor may not incur Indebtedness under this paragraph if, after giving pro forma effect to such incurrence (including a pro forma application of the net proceeds therefrom), the aggregate principal amount of Indebtedness of such non-Guarantor Subsidiary outstanding under this paragraph at such time would exceed the greater of (A) $35.0 million Company’s Consolidated Net Leverage Ratio is equal to or (B) 30% of Consolidated EBITDA for the Applicable Measurement Period.less than 3.00 to 1.00.
(b) The provisions Notwithstanding clause (a) above, the Company and its Restricted Subsidiaries (other than Olinda Star and any of its respective Subsidiaries unless and until Olinda Star has (i) provided a valid and binding Note Guarantee pursuant to Section 4.09(a10.06(a) hereof will not prohibit and (ii) delivered the incurrence of any of valid and perfected Liens and other documents described in Section 4.20 hereof, including the related Springing Security Documents, as applicable) may Incur the following items of Indebtedness (collectively, “Permitted Indebtedness”):
(1) Indebtedness under in respect of the Notes issued on the Issue Date (including Date, plus any PIK Notes issued in accordance with Section 2.13, less the related amounts required to be paid in accordance with Section 4.01, and, in each case, the Note Guarantees);Guarantees associated thereto;
(2) Indebtedness incurred pursuant to Credit Facilities in an aggregate principal amount at any time outstanding not to exceed the greater of (a) $275.0 million and (b) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated Secured Debt Ratio would be no greater than 2.25 to 1.0; provided that, solely for purposes of determining the amount of Indebtedness that may be incurred under clause (2)(b), all Indebtedness incurred under this clause (2) shall be treated as Indebtedness secured by Liens (whether or not is it so secured);
(3) Indebtedness of the Company and its Restricted Subsidiaries outstanding on the Issue Date (other than Indebtedness under clause (1) and (2) of this Section 4.09(b)) (including any amendments or replacements thereof that do not increase the principal amount);
(4) Swap Obligations of the Company or any of its Restricted Subsidiaries; provided, however, that such Swap Obligations are entered into for the purpose of mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by the Company or such Restricted Subsidiary, or changes in the value of securities issued or held by the Company or such Restricted Subsidiary or held by Death Care Trusts, and in each case, not entered into for purposes of speculation;
(5) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary of the Company owing to and held by the Company or any other Restricted Subsidiary of the Company; provided, however, that: (a) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other the Company or a Restricted Subsidiary of the Company, and (b) any sale or other transfer (excluding Permitted Liens) of any such Indebtedness to a Person other than the Company or a Restricted Subsidiary of the Company, shall be deemed, in each case, to be the incurrence of Indebtedness by the Company or such Restricted Subsidiary, as the case may be, not permitted by this clause (5);
(a) obligations pursuant to any cash management agreement and other Indebtedness in respect of netting services, overdraft protections and similar arrangements and (b) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business;
(7) Indebtedness of the Company or any of its Restricted Subsidiaries represented by letters of credit, pledges or deposits for the account of the Company or such Restricted Subsidiary, as the case may be, in order to provide security for workers’ compensation claims, payment obligations in connection with health, disability or other employee benefits or property, casualty or life insurance or self-insurance, the purchase of goods or other requirements in the ordinary course of business;
(8) Indebtedness represented by guarantees by the Company or its Restricted Subsidiaries of Indebtedness otherwise permitted to be incurred under this Indenture; provided that, in the case of a guarantee by a Restricted Subsidiary, such Restricted Subsidiary complies with Section 4.17 to the extent applicable;
(9) Indebtedness of the Company or any of its Restricted Subsidiaries in respect of bid, payment and performance bonds, bankers’ acceptances, workers’ compensation claims, surety or appeal bonds, payment obligations in connection with insurance or similar obligations, and bank overdrafts (and letters of credit in respect thereof) in the ordinary course of business;
(10) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees, earn-outs, hold backs, incentives, non-competes, consulting, indemnities or obligations (contingent or other) in respect of purchase price adjustments or other indemnities in connection with the acquisition or disposition of assets or Capital Stock;
(11) Indebtedness of (x) the Company or any Restricted Subsidiary incurred or issued to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged into or amalgamated or consolidated with the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger, amalgamation or consolidation, either: (a) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in Section 4.09(a); or (b) the Consolidated Fixed Charge Coverage Ratio of the Company and its Restricted Subsidiaries would not be lower than immediately prior to such acquisition, merger, amalgamation or consolidation; provided, further, that any Restricted Subsidiary of the Company that is not or will not, upon such incurrence, become a Guarantor may not incur Indebtedness under clause (x) of this clause (11) if, after giving pro forma effect to such incurrence (including a pro forma application of the net proceeds therefrom), the aggregate principal amount of Indebtedness of such non-Guarantor Subsidiary outstanding under clause (x) of this clause (11) at such time would exceed the greater of (A) $35.0 million or (B) 35% of Consolidated EBITDA for the Applicable Measurement Period;
(12) Indebtedness represented by Capitalized Lease Obligations and Purchase Money Indebtedness of the Company and its Restricted Subsidiaries in an aggregate principal amount at any time outstanding, including any Refinancing Indebtedness in respect thereof, not to exceed the greater of (A) $35.0 million or (B) 35% of Consolidated EBITDA for the Applicable Measurement Period;
(13) Indebtedness of the Company evidenced by commercial paper issued by the Company; provided that the aggregate outstanding principal amount of Indebtedness incurred pursuant to clause (2) of this Section 4.09(b) and this clause (13) does not exceed the maximum amount of Indebtedness permitted under clause (2) of this Section 4.09(b);
(14) Refinancing Indebtedness in respect of Indebtedness described in clauses (1), (3), (4), (10), (11), (1215), (16), (17), (18) and (1719) of this Section 4.09(bhereof or that replaces Indebtedness described therein pursuant to the RJ Plan Amendment) and this clause (14);which, solely with respect to Indebtedness to one of more third-parties for borrowed money or in exchange for claims under the Plan Support Agreement, is as set forth on Schedule 4.09 hereof;
(153) Indebtedness Guarantees by any Subsidiary Guarantor of any Foreign Subsidiary in an aggregate principal amount at any time outstanding not to exceed the greater of $30.0 million or 10% of such Foreign Subsidiary’s consolidated total assets;
(16) Subordinated Indebtedness of the Company or any Restricted Subsidiary Guarantor permitted under this Indenture (other than any Indebtedness Incurred pursuant to clauses (14) through (19)); provided that if any such Guarantee is of Subordinated Indebtedness, then the Guarantee of such Subordinated Indebtedness shall be subordinated (or be junior in an aggregate principal amount not Lien priority) at least to exceed the greater of $35.0 million same extent and 35% of Consolidated EBITDA for in the Applicable Measurement Periodsame manner to the Notes or the Note Guarantees, as applicable;
(174) [reserved];
(5) intercompany Indebtedness to customers incurred between the Company and any Restricted Subsidiary or between any Restricted Subsidiaries in the ordinary course of business, including business and consistent with respect to Obligations for deferred delivery of goods, services or interment rights, and Obligations for refunds of customer deposits and preneed payments pursuant to the terms of customer contracts or applicable law;past practice; provided that:
(18A) Indebtedness to Death Care Trusts incurred in the ordinary course of business, including Obligations to Death Care Trusts for the deposit of funds with respect to customer payments for preneed sales of goods, services or interment rights, Obligations to deposit funds with respect to perpetual care or endowed care cemeteries, and Obligations to maintain minimum Death Care Trust balances as required by the governing documents of Death Care Trusts or applicable law;
(19) Indebtedness consisting of Indebtedness issued by if the Company or any of its Restricted Subsidiaries Subsidiary Guarantor is the obligor with respect to present, future or former directors, officers, employees and consultants of the Company or any of its Subsidiaries or their authorized representatives, in each case to finance the repurchase, redemption or other acquisition by the Company of Common Stock of the Company to the extent permitted by Section 4.07(b)(4);
(20) such intercompany Indebtedness of the Company or any of its Restricted Subsidiaries consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements in each case, incurred in the ordinary course of business; and
(21) additional Indebtedness of the Company and the Restricted Subsidiaries in an aggregate principal amount at any time outstanding, including any Refinancing Indebtedness in respect thereof, not to exceed the greater of obligee is (Ai) $70.0 million and (B) 60% of Consolidated EBITDA for the Applicable Measurement Period. For purposes of determining any particular amount of Indebtedness under this Section 4.09, guarantees, Liens or letter of credit obligations supporting Indebtedness otherwise included in the determination of such particular amount shall not be included. For purposes of determining compliance with this Section 4.09, in the event that all or a portion of an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (21) of Section 4.09(b) or is permitted to be incurred pursuant to Section 4.09(a), the Company shall, in its sole discretion, divide, classify (or later reclassify) such item or portion of such item of Indebtedness in any manner that complies with this Section 4.09, including under Section 4.09(a) if such reclassified Indebtedness could then be incurred under such test, except that Indebtedness outstanding under the Credit Agreement on the Issue Date shall be deemed to have been incurred on the Issue Date under Section 4.09(b)(2) and may not be reclassified. Accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the payment of dividends on Disqualified Capital Stock in the form of additional shares of the same class of Disqualified Capital Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Capital Stock for purposes of this Section 4.09. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date that is not a Subsidiary Guarantor or (andii) an ALB Entity, if such Indebtedness is not permitted to must be incurred as of such date under this Section 4.09, the Company shall be in default of this Section 4.09). In the event that the Company or a Restricted Subsidiary (x) incurs Indebtedness to finance an acquisition or (y) assumes Indebtedness of Persons that are acquired by the Company or any Restricted Subsidiary or merged into, or consolidated, amalgamated or combined with, the Company or a Restricted Subsidiary in accordance with the terms of this Indenture, the date of determination of the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, shall, at the option of the Company, be the date that a definitive agreement for such acquisition is entered into and the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, shall be calculated giving pro forma effect to such acquisition and the other transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) consistent with the definition of the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, unsecured and, for the avoidance of doubt, (A) if any such ratios are exceeded as a result of fluctuations in such ratio (including due to fluctuations in the Consolidated Adjusted EBITDA of the Company or the target company) at or prior to the consummation of the relevant acquisition, such ratios will not be deemed to have been exceeded as a result of such fluctuations solely for purposes of determining whether such acquisition and any related transactions are permitted under this Indenture and (B) such ratios shall not be tested at the time of consummation of such acquisition or related transactions; provided that if the Company elects to have such determinations occur at the time of entry into such definitive agreement, (i) any such transaction shall be deemed to have occurred on the date the definitive agreement is entered into and to be outstanding thereafter for purposes of calculating any ratios under this Indenture after the date of such agreement and before the earlier of the date of consummation of such acquisition or the date such agreement is terminated or expires without consummation of such acquisition and (ii) to the extent any covenant baskets were utilized in satisfying any covenants, such baskets shall be deemed utilized, but any calculation of Consolidated EBITDA for purposes of other incurrences of Indebtedness or Liens or making of Restricted Payments (not related to such acquisition) shall not reflect such acquisition until it has been consummated. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt, and the amount of such debt will not be deemed to change as a result of fluctuations in currency exchange rates after such date of incurrence or commitment; provided, that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such Refinancing Indebtedness does not exceed (a) the principal amount of such Indebtedness being refinanced plus (b) the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums (including, without limitation, tender premiums) and other costs and expenses (including, without limitation, original issue discount, upfront fees or similar fees) incurred in connection with such refinancing. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or a Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Inde
Appears in 1 contract
Sources: Indenture
Incurrence of Additional Indebtedness. (a) The Company will Borrowers shall not, and will not permit on or after May 1, 2004, borrow or incur any liability in respect of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, acquire, become liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness borrowed-money indebtedness (including, without limitation, Acquired Indebtednessloans, notes, bonds or repurchase obligations in respect of any securitizations); provided, howeverfinancing or capitalized leases, thatliabilities for the deferred purchase price of property (excluding accounts payable arising in the ordinary course of business but including all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property), the Company and the Restricted Subsidiaries may incur Indebtedness (includingliabilities in respect of letters of credit or similar instruments, without limitation, Acquired Indebtedness) if on the date liabilities in respect of interest rate swaps or similar instruments or any guaranties in respect of any of the incurrence foregoing if the aggregate amount thereof (excluding any amounts outstanding under this Agreement and without double-counting any of such Indebtedness, after giving pro forma effect the foregoing items) exceeds $75,000,000 unless the Majority Lenders shall have (prior to the incurrence thereof) consented to the same, the Consolidated Fixed Charge Coverage Ratio of the Company is at least 2.0 to 1.0; provided, further, that any Restricted Subsidiary of the Company that is in writing (which consent shall not be unreasonably withheld or will not, upon such incurrence, become a Guarantor may not incur Indebtedness under this paragraph if, after giving pro forma effect to such incurrence (including a pro forma application of the net proceeds therefromdelayed), the aggregate principal amount of Indebtedness of such non-Guarantor Subsidiary outstanding under this paragraph at such time would exceed the greater of (A) $35.0 million or (B) 30% of Consolidated EBITDA for the Applicable Measurement Period.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of provided that in no case shall any of the following foregoing items be incurred if the same are secured by any of Indebtedness the Collateral (collectively, “Permitted Indebtedness”):
(1) Indebtedness under the Notes issued on the Issue Date (including the related Note Guarantees);
(2) Indebtedness incurred except pursuant to Credit Facilities intercreditor agreements in an aggregate principal amount at any time outstanding not to exceed the greater of (a) $275.0 million form and (b) an amount such that, on a pro forma basis after giving effect substance acceptable to the incurrence Majority Lenders) and provided further that none of such Indebtedness (and application items shall be secured by assets of the net proceeds therefrom), Borrowers other than Collateral if the Consolidated Secured Debt Ratio would be no greater than 2.25 to 1.0; provided that, solely for purposes of determining aggregate amount thereof shall exceed $25,000,000 (even if the total amount of Indebtedness that may be incurred under clause (2)(b), all Indebtedness items incurred under this clause (2e) shall be treated as Indebtedness secured by Liens less than $75,000,000) unless the Majority Lenders shall have (whether or not is it so secured);
(3prior to the incurrence thereof) Indebtedness of consented to the Company and its Restricted Subsidiaries outstanding on the Issue Date (other than Indebtedness under clause (1) and (2) of this Section 4.09(b)) (including any amendments or replacements thereof that do not increase the principal amount);
(4) Swap Obligations of the Company or any of its Restricted Subsidiaries; provided, however, that such Swap Obligations are entered into for the purpose of mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by the Company or such Restricted Subsidiary, or changes in the value of securities issued or held by the Company or such Restricted Subsidiary or held by Death Care Trusts, and in each case, not entered into for purposes of speculation;
(5) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary of the Company owing to and held by the Company or any other Restricted Subsidiary of the Company; provided, however, that: (a) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other the Company or a Restricted Subsidiary of the Company, and (b) any sale or other transfer (excluding Permitted Liens) of any such Indebtedness to a Person other than the Company or a Restricted Subsidiary of the Company, shall be deemedsame, in each case, to be the incurrence of Indebtedness by the Company or such Restricted Subsidiary, as the case may be, not permitted by this clause writing (5);
(a) obligations pursuant to any cash management agreement and other Indebtedness in respect of netting services, overdraft protections and similar arrangements and (b) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business;
(7) Indebtedness of the Company or any of its Restricted Subsidiaries represented by letters of credit, pledges or deposits for the account of the Company or such Restricted Subsidiary, as the case may be, in order to provide security for workers’ compensation claims, payment obligations in connection with health, disability or other employee benefits or property, casualty or life insurance or self-insurance, the purchase of goods or other requirements in the ordinary course of business;
(8) Indebtedness represented by guarantees by the Company or its Restricted Subsidiaries of Indebtedness otherwise permitted to be incurred under this Indenture; provided that, in the case of a guarantee by a Restricted Subsidiary, such Restricted Subsidiary complies with Section 4.17 to the extent applicable;
(9) Indebtedness of the Company or any of its Restricted Subsidiaries in respect of bid, payment and performance bonds, bankers’ acceptances, workers’ compensation claims, surety or appeal bonds, payment obligations in connection with insurance or similar obligations, and bank overdrafts (and letters of credit in respect thereof) in the ordinary course of business;
(10) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees, earn-outs, hold backs, incentives, non-competes, consulting, indemnities or obligations (contingent or other) in respect of purchase price adjustments or other indemnities in connection with the acquisition or disposition of assets or Capital Stock;
(11) Indebtedness of (x) the Company or any Restricted Subsidiary incurred or issued to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged into or amalgamated or consolidated with the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger, amalgamation or consolidation, either: (a) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in Section 4.09(a); or (b) the Consolidated Fixed Charge Coverage Ratio of the Company and its Restricted Subsidiaries would not be lower than immediately prior to such acquisition, merger, amalgamation or consolidation; provided, further, that any Restricted Subsidiary of the Company that is not or will not, upon such incurrence, become a Guarantor may not incur Indebtedness under clause (x) of this clause (11) if, after giving pro forma effect to such incurrence (including a pro forma application of the net proceeds therefrom), the aggregate principal amount of Indebtedness of such non-Guarantor Subsidiary outstanding under clause (x) of this clause (11) at such time would exceed the greater of (A) $35.0 million or (B) 35% of Consolidated EBITDA for the Applicable Measurement Period;
(12) Indebtedness represented by Capitalized Lease Obligations and Purchase Money Indebtedness of the Company and its Restricted Subsidiaries in an aggregate principal amount at any time outstanding, including any Refinancing Indebtedness in respect thereof, not to exceed the greater of (A) $35.0 million or (B) 35% of Consolidated EBITDA for the Applicable Measurement Period;
(13) Indebtedness of the Company evidenced by commercial paper issued by the Company; provided that the aggregate outstanding principal amount of Indebtedness incurred pursuant to clause (2) of this Section 4.09(b) and this clause (13) does not exceed the maximum amount of Indebtedness permitted under clause (2) of this Section 4.09(b);
(14) Refinancing Indebtedness in respect of Indebtedness described in clauses (1), (3), (4), (10), (11), (12) and (17) of this Section 4.09(b) and this clause (14);
(15) Indebtedness of any Foreign Subsidiary in an aggregate principal amount at any time outstanding not to exceed the greater of $30.0 million or 10% of such Foreign Subsidiary’s consolidated total assets;
(16) Subordinated Indebtedness of the Company or any Restricted Subsidiary in an aggregate principal amount not to exceed the greater of $35.0 million and 35% of Consolidated EBITDA for the Applicable Measurement Period;
(17) Indebtedness to customers incurred in the ordinary course of business, including with respect to Obligations for deferred delivery of goods, services or interment rights, and Obligations for refunds of customer deposits and preneed payments pursuant to the terms of customer contracts or applicable law;
(18) Indebtedness to Death Care Trusts incurred in the ordinary course of business, including Obligations to Death Care Trusts for the deposit of funds with respect to customer payments for preneed sales of goods, services or interment rights, Obligations to deposit funds with respect to perpetual care or endowed care cemeteries, and Obligations to maintain minimum Death Care Trust balances as required by the governing documents of Death Care Trusts or applicable law;
(19) Indebtedness consisting of Indebtedness issued by the Company or any of its Restricted Subsidiaries to present, future or former directors, officers, employees and consultants of the Company or any of its Subsidiaries or their authorized representatives, in each case to finance the repurchase, redemption or other acquisition by the Company of Common Stock of the Company to the extent permitted by Section 4.07(b)(4);
(20) Indebtedness of the Company or any of its Restricted Subsidiaries consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements in each case, incurred in the ordinary course of business; and
(21) additional Indebtedness of the Company and the Restricted Subsidiaries in an aggregate principal amount at any time outstanding, including any Refinancing Indebtedness in respect thereof, not to exceed the greater of (A) $70.0 million and (B) 60% of Consolidated EBITDA for the Applicable Measurement Period. For purposes of determining any particular amount of Indebtedness under this Section 4.09, guarantees, Liens or letter of credit obligations supporting Indebtedness otherwise included in the determination of such particular amount which consent shall not be included. For purposes of determining compliance with this Section 4.09, in the event that all unreasonably withheld or a portion of an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (21) of Section 4.09(b) or is permitted to be incurred pursuant to Section 4.09(adelayed), the Company shall, in its sole discretion, divide, classify (or later reclassify) such item or portion of such item of Indebtedness in any manner that complies with this Section 4.09, including under Section 4.09(a) if such reclassified Indebtedness could then be incurred under such test, except that Indebtedness outstanding under the Credit Agreement on the Issue Date shall be deemed to have been incurred on the Issue Date under Section 4.09(b)(2) and may not be reclassified. Accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the payment of dividends on Disqualified Capital Stock in the form of additional shares of the same class of Disqualified Capital Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Capital Stock for purposes of this Section 4.09. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date (and, if such Indebtedness is not permitted to be incurred as of such date under this Section 4.09, the Company shall be in default of this Section 4.09). In the event that the Company or a Restricted Subsidiary (x) incurs Indebtedness to finance an acquisition or (y) assumes Indebtedness of Persons that are acquired by the Company or any Restricted Subsidiary or merged into, or consolidated, amalgamated or combined with, the Company or a Restricted Subsidiary in accordance with the terms of this Indenture, the date of determination of the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, shall, at the option of the Company, be the date that a definitive agreement for such acquisition is entered into and the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, shall be calculated giving pro forma effect to such acquisition and the other transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) consistent with the definition of the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, and, for the avoidance of doubt, (A) if any such ratios are exceeded as a result of fluctuations in such ratio (including due to fluctuations in the Consolidated Adjusted EBITDA of the Company or the target company) at or prior to the consummation of the relevant acquisition, such ratios will not be deemed to have been exceeded as a result of such fluctuations solely for purposes of determining whether such acquisition and any related transactions are permitted under this Indenture and (B) such ratios shall not be tested at the time of consummation of such acquisition or related transactions; provided that if the Company elects to have such determinations occur at the time of entry into such definitive agreement, (i) any such transaction shall be deemed to have occurred on the date the definitive agreement is entered into and to be outstanding thereafter for purposes of calculating any ratios under this Indenture after the date of such agreement and before the earlier of the date of consummation of such acquisition or the date such agreement is terminated or expires without consummation of such acquisition and (ii) to the extent any covenant baskets were utilized in satisfying any covenants, such baskets shall be deemed utilized, but any calculation of Consolidated EBITDA for purposes of other incurrences of Indebtedness or Liens or making of Restricted Payments (not related to such acquisition) shall not reflect such acquisition until it has been consummated. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt, and the amount of such debt will not be deemed to change as a result of fluctuations in currency exchange rates after such date of incurrence or commitment; provided, that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such Refinancing Indebtedness does not exceed (a) the principal amount of such Indebtedness being refinanced plus (b) the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums (including, without limitation, tender premiums) and other costs and expenses (including, without limitation, original issue discount, upfront fees or similar fees) incurred in connection with such refinancing. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or a Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Inde.
Appears in 1 contract
Sources: Wholesale Financing Agreement (Palm Harbor Homes Inc /Fl/)
Incurrence of Additional Indebtedness. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee, acquire, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”"INCUR") any Indebtedness (including, without limitation, including Acquired IndebtednessDebt); provided, however, that, that the Company and the Restricted its Subsidiaries may incur Indebtedness (including, without limitation, including Acquired IndebtednessDebt) if on the date Company's Debt to EBITDA Ratio at the time of the incurrence of such Indebtedness, after giving pro forma effect to such incurrence or issuance as of such date and to the incurrence thereof, use of proceeds therefrom as if the Consolidated Fixed Charge Coverage Ratio same had occurred at the beginning of the most recently ended four full fiscal quarter period of the Company is at least 2.0 for which internal financial statements are available, would have been no greater than 3.5 to 1.0; provided, further, that any Restricted Subsidiary 1. The first paragraph of the Company that is not or will not, upon such incurrence, become a Guarantor may not incur Indebtedness under this paragraph if, after giving pro forma effect to such incurrence (including a pro forma application of the net proceeds therefrom), the aggregate principal amount of Indebtedness of such non-Guarantor Subsidiary outstanding under this paragraph at such time would exceed the greater of (A) $35.0 million or (B) 30% of Consolidated EBITDA for the Applicable Measurement Period.
(b) The provisions of Section 4.09(a) hereof covenant will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Indebtedness”"PERMITTED DEBT"):
(1a) the incurrence by the Company of additional Indebtedness and letters of credit under the Notes issued on the Issue Date (including the related Note Guarantees);
(2) Indebtedness incurred pursuant to one or more Credit Facilities in an aggregate principal amount at any one time outstanding not to exceed the greater of (a) $275.0 million and (b) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated Secured Debt Ratio would be no greater than 2.25 to 1.0; provided that, solely for purposes of determining the amount of Indebtedness that may be incurred under clause (2)(b), all Indebtedness incurred under this clause (2a) shall be treated as Indebtedness secured by Liens (whether or not is it so secured);
(3) Indebtedness with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries outstanding on thereunder) not to exceed $45.0 million, $30.0 million of which shall be used in connection with the Issue Date direct or indirect acquisition of Equity Interests of a Person engaged in, or assets related to, the information technology services business, business process outsourcing or businesses complementary or ancillary thereto or for the acquisition by the Company or any of its Subsidiaries of new customers or customer contracts;
(other than b) the incurrence by the Company and its Restricted Subsidiaries of Existing Indebtedness;
(c) the incurrence by the Company of Indebtedness under clause represented by the Notes to be issued hereby (1) and (2) of this Section 4.09(b)) (including any amendments or replacements thereof that do not increase additional Notes purchased by the principal amountinitial purchaser pursuant to its 30-day option to purchase additional Notes);
(4d) Swap Obligations the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (d), not to exceed $7.5 million at any time outstanding;
(e) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this covenant or clauses (b), (c), (d), (e) or (l) of this paragraph;
(f) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that such Swap Obligations are entered into for the purpose of mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by if the Company or is the obligor on such Restricted SubsidiaryIndebtedness, or changes such Indebtedness must be expressly subordinated to payment of any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the Notes to the extent provided in the value of securities issued or held by the Company or such Restricted Subsidiary or held by Death Care Trusts, and in each case, not entered into for purposes of speculationthis Indenture;
(5g) Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary of the Company owing to and held incurrence by the Company or any other of its Restricted Subsidiary Subsidiaries of Subordinated Indebtedness;
(h) the Company; provided, however, that: (a) any subsequent issuance or transfer of Capital Stock incurrence by the Company or any other event which results in of its Restricted Subsidiaries of Hedging Obligations;
(i) the guarantee by the Company or any such of its Restricted Subsidiaries of Indebtedness being held by a Person other of the Company or a Restricted Subsidiary of the CompanyCompany that was permitted to be incurred by another provision of this covenant; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, and (b) any sale or other transfer (excluding Permitted Liens) of any such Indebtedness to a Person other than then the Company or a Restricted Subsidiary of the Company, Guarantee shall be deemedsubordinated or pari passu, in each caseas applicable, to be the same extent as the Indebtedness guaranteed;
(j) the incurrence of Indebtedness by the Company or such any of its Restricted Subsidiary, as the case may be, not permitted by this clause (5);
(a) obligations pursuant to any cash management agreement and other Subsidiaries of Indebtedness in respect of netting servicesworkers' compensation claims, overdraft protections self-insurance obligations, bankers' acceptances, performance and similar arrangements and surety bonds in the ordinary course of business;
(bk) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business;funds, so long as such Indebtedness is covered within five business days; and
(7) Indebtedness of the Company or any of its Restricted Subsidiaries represented by letters of credit, pledges or deposits for the account of the Company or such Restricted Subsidiary, as the case may be, in order to provide security for workers’ compensation claims, payment obligations in connection with health, disability or other employee benefits or property, casualty or life insurance or self-insurance, the purchase of goods or other requirements in the ordinary course of business;
(8) Indebtedness represented by guarantees by the Company or its Restricted Subsidiaries of Indebtedness otherwise permitted to be incurred under this Indenture; provided that, in the case of a guarantee by a Restricted Subsidiary, such Restricted Subsidiary complies with Section 4.17 to the extent applicable;
(9) Indebtedness of the Company or any of its Restricted Subsidiaries in respect of bid, payment and performance bonds, bankers’ acceptances, workers’ compensation claims, surety or appeal bonds, payment obligations in connection with insurance or similar obligations, and bank overdrafts (and letters of credit in respect thereof) in the ordinary course of business;
(10) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees, earn-outs, hold backs, incentives, non-competes, consulting, indemnities or obligations (contingent or other) in respect of purchase price adjustments or other indemnities in connection with the acquisition or disposition of assets or Capital Stock;
(11) Indebtedness of (xl) the Company or any Restricted Subsidiary incurred or issued to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged into or amalgamated or consolidated with the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger, amalgamation or consolidation, either: (a) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in Section 4.09(a); or (b) the Consolidated Fixed Charge Coverage Ratio of the Company and its Restricted Subsidiaries would not be lower than immediately prior to such acquisition, merger, amalgamation or consolidation; provided, further, that any Restricted Subsidiary of the Company that is not or will not, upon such incurrence, become a Guarantor may not incur Indebtedness under clause (x) of this clause (11) if, after giving pro forma effect to such incurrence (including a pro forma application of the net proceeds therefrom), the aggregate principal amount of Indebtedness of such non-Guarantor Subsidiary outstanding under clause (x) of this clause (11) at such time would exceed the greater of (A) $35.0 million or (B) 35% of Consolidated EBITDA for the Applicable Measurement Period;
(12) Indebtedness represented by Capitalized Lease Obligations and Purchase Money Indebtedness of the Company and its Restricted Subsidiaries in an aggregate principal amount at any time outstanding, including any Refinancing Indebtedness in respect thereof, not to exceed the greater of (A) $35.0 million or (B) 35% of Consolidated EBITDA for the Applicable Measurement Period;
(13) Indebtedness of the Company evidenced by commercial paper issued by the Company; provided that the aggregate outstanding principal amount of Indebtedness incurred pursuant to clause (2) of this Section 4.09(b) and this clause (13) does not exceed the maximum amount of Indebtedness permitted under clause (2) of this Section 4.09(b);
(14) Refinancing Indebtedness in respect of Indebtedness described in clauses (1), (3), (4), (10), (11), (12) and (17) of this Section 4.09(b) and this clause (14);
(15) Indebtedness of any Foreign Subsidiary in an aggregate principal amount at any time outstanding not to exceed the greater of $30.0 million or 10% of such Foreign Subsidiary’s consolidated total assets;
(16) Subordinated Indebtedness of the Company or any Restricted Subsidiary in an aggregate principal amount not to exceed the greater of $35.0 million and 35% of Consolidated EBITDA for the Applicable Measurement Period;
(17) Indebtedness to customers incurred in the ordinary course of business, including with respect to Obligations for deferred delivery of goods, services or interment rights, and Obligations for refunds of customer deposits and preneed payments pursuant to the terms of customer contracts or applicable law;
(18) Indebtedness to Death Care Trusts incurred in the ordinary course of business, including Obligations to Death Care Trusts for the deposit of funds with respect to customer payments for preneed sales of goods, services or interment rights, Obligations to deposit funds with respect to perpetual care or endowed care cemeteries, and Obligations to maintain minimum Death Care Trust balances as required by the governing documents of Death Care Trusts or applicable law;
(19) Indebtedness consisting of Indebtedness issued by the Company or any of its Restricted Subsidiaries to present, future or former directors, officers, employees and consultants of the Company or any of its Subsidiaries or their authorized representatives, in each case to finance the repurchase, redemption or other acquisition by the Company of Common Stock of the Company to the extent permitted by Section 4.07(b)(4);
(20) Indebtedness of the Company or any of its Restricted Subsidiaries consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements in each case, incurred in the ordinary course of business; and
(21) additional Indebtedness of the Company and the Restricted Subsidiaries in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including any all Permitted Refinancing Indebtedness in respect thereofincurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (l), not to exceed the greater $5.0 million.
1. The accrual of (A) $70.0 million and (B) 60% of Consolidated EBITDA for the Applicable Measurement Period. For purposes of determining any particular amount of Indebtedness under this Section 4.09, guarantees, Liens or letter of credit obligations supporting Indebtedness otherwise included in the determination of such particular amount shall not be included. For purposes of determining compliance with this Section 4.09, in the event that all or a portion of an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (21) of Section 4.09(b) or is permitted to be incurred pursuant to Section 4.09(a)Interest, the Company shall, in its sole discretion, divide, classify (or later reclassify) such item or portion of such item of Indebtedness in any manner that complies with this Section 4.09, including under Section 4.09(a) if such reclassified Indebtedness could then be incurred under such test, except that Indebtedness outstanding under the Credit Agreement on the Issue Date shall be deemed to have been incurred on the Issue Date under Section 4.09(b)(2) and may not be reclassified. Accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the payment reclassification of dividends on Disqualified Capital Stock preferred stock as Indebtedness due to a change in the form of additional shares of the same class of Disqualified Capital Stock accounting principles, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Capital Stock for purposes of this Section 4.09. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date (and, if such Indebtedness is not permitted to be incurred as of such date under this Section 4.09, the Company shall be in default of this Section 4.09). In the event that the Company or a Restricted Subsidiary (x) incurs Indebtedness to finance an acquisition or (y) assumes Indebtedness of Persons that are acquired by the Company or any Restricted Subsidiary or merged into, or consolidated, amalgamated or combined with, the Company or a Restricted Subsidiary in accordance with the terms of this Indenture, the date of determination of the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, shall, at the option of the Company, be the date that a definitive agreement for such acquisition is entered into and the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, shall be calculated giving pro forma effect to such acquisition and the other transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) consistent with the definition of the Consolidated Fixed Charge Coverage Ratio or Consolidated EBITDA, as applicable, and, for the avoidance of doubt, (A) if any such ratios are exceeded as a result of fluctuations in such ratio (including due to fluctuations in the Consolidated Adjusted EBITDA of the Company or the target company) at or prior to the consummation of the relevant acquisition, such ratios will not be deemed to have been exceeded as a result of such fluctuations solely for purposes of determining whether such acquisition and any related transactions are permitted under this Indenture and (B) such ratios shall not be tested at the time of consummation of such acquisition or related transactions; provided that if the Company elects to have such determinations occur at the time of entry into such definitive agreement, (i) any such transaction shall be deemed to have occurred on the date the definitive agreement is entered into and to be outstanding thereafter for purposes of calculating any ratios under this Indenture after the date of such agreement and before the earlier of the date of consummation of such acquisition or the date such agreement is terminated or expires without consummation of such acquisition and (ii) to the extent any covenant baskets were utilized in satisfying any covenants, such baskets shall be deemed utilized, but any calculation of Consolidated EBITDA for purposes of other incurrences of Indebtedness or Liens or making of Restricted Payments (not related to such acquisition) shall not reflect such acquisition until it has been consummated. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt, and the amount of such debt will not be deemed to change as a result of fluctuations in currency exchange rates after such date of incurrence or commitment; provided, that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such Refinancing Indebtedness does not exceed (a) the principal amount of such Indebtedness being refinanced plus (b) the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums (including, without limitation, tender premiums) and other costs and expenses (including, without limitation, original issue discount, upfront fees or similar fees) incurred in connection with such refinancing9.1. Notwithstanding any other provision of this Section 4.099.1, the maximum amount of Indebtedness that the Company or a any Restricted Subsidiary may incur pursuant to this Section 4.09 covenant shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currenciesrates or currency values. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indeoutstanding as of any date will be:
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Sources: Indenture (Infocrossing Inc)